Why are there so few sports technology unicorns?

Sports fuel passions around the world, arguably on a more global scale than any other shared interest. World Atlas reports that there are more than 4 billion soccer fans around the world, more than 10x the population of the US and more than half the planet’s population.

I’ve been a dedicated fan and athlete my whole life, from playing youth sport to the college level, and now regularly exercising 5-6 days per week. It’s a rare exception when my day doesn’t include some flavor of sports TV, radio or online media, whether it’s SportsCenter, a game, The Herd, box scores or a sports-related book (check out my list of favorites at the bottom of the post). And of course, I manage my workouts with an Apple Watch, regularly explore social media for new techniques or routines, enjoy my Peloton, and have recently started my own YouTube channel. I am not a gambler or gamer, so sports betting and esports are not part of my routine, but my teenage son follows Ninja and is an avid Fortnite and Madden gamer!

Yet why, if there are billions of like-minded souls out there — sure, some less and some more devoted — are there so few sports tech unicorns? This is an enormous market. I have some theories.

A lot of spending, but highly fragmented

The North American sports market is approaching $160 Billion in annual revenue, a figure that includes Professional (est. $70 Billion), Betting (est. $40 Billion), Health & Fitness (est. $30 Billion), Youth (est. $15 Billion), eSports (est. $400 Million), and Analytics (est. at $300 million). Including the US sports apparel market, that’s another $122 Billion, pushing the total to just over $280 Billion. Globally, the number is of course much bigger. Even though $280B is an interesting number, companies don’t typically address this aggregate space given the complexities and differences of the individual segments.  According to CB Insights, the markets that have produced the most unicorns are eCommerce, Internet Software & Services, and FinTech. These markets and associated services inherently support a wide demographic. And while Sports does the same, there really isn’t the natural crossover enabling that one product that fits all (or most).

This crossover challenge becomes evident when considering the different ages (e.g. youth, young-adult, adult), levels (e.g. recreation, club/travel, high school, amateur, professional, associations), categories (e.g. fitness, performance, recruiting, scouting, management, communication, merchandise, viewing experiences, education, advertising, payments, events), and ultimately customers (e.g. parents, athletes, teams, leagues, schools, event operators, sponsors, governing bodies, associations). How can one company build a product and sales strategy that crosses these differences? Even firms such as PwC and research companies struggle with consistent market frameworks as everyone seems to have their own flavor of segmentation.

Limited funding and exits

Funding, especially that beyond the seed stage, is challenging even though many athletes and team owners are getting into the investment game as well as the emergence of targeted investment funds such as Sapphire Sport, Courtside Ventures, Hype Capital, and Fullstack Sports Ventures. These funds are mostly early-stage and relatively small as Sapphire is $115M, Hype is $75M, and Courtside is just $35M. Most investors are targeting the intersection of sports and media with the intent of capturing a portion of the money being spent on content. Essentially defining Sports companies as Media companies. Smart and understandable. But there hasn’t been that “big bet” or “big exit” although Peloton could change the landscape given their pending IPO and $4B valuation on funding of approximately $1B and estimated $140M in revenue. Softbank’s Vision Fund, one of the biggest, interestingly does not have a sports tech-specific investment on their roster (Fanatics is the closest).

Other notable companies include Discord ($2B valuation, funding approx. $270M, est. $5M in revenue), Calm ($1B valuation, funding  approx. $115M, est. $40M in revenue), Hudl ($460M valuation, funding approx. $110 Million, est. $15M in revenue), and TeamSnap (funding approx. $45 Million, est. $12M in revenue).

So, while Sports has a few highly funded companies, it’s not as many as you might think given the attention, especially around AI and analytics.

Analytics hasn’t developed into a big market

Billy Bean and the A’s were supposed to win the World Series (multiple times) and validate the era of analytics without the mega player contracts. It’s been since 2002, and we’re still waiting for that economical championship. Daryl Morey and the Rockets have dedicated their entire existence to analytics while also spending on players, but have yet to even make an NBA Finals appearance. Bill Belichick famously dismissed analytics as just a side tool.

These examples aside, analytics has taken hold and represents a dramatic shift in mindset and skills. Analytics is, however, a broad term encompassing a range of applications such as how much to spend on a player contract to schemes and breaking down video footage to injury prevention and prediction. Useful stuff. The flip side though is that sports people don’t like to share, especially those with the money to spend on technology. So if you are building a market opportunity case for analytics, the numbers tend to be relatively small given the finite market (add up all the pro sports and major D1 programs that can afford your product, then use say an aggressive 50% attach rate). But since most teams don’t like to share in the name of competitive advantage and actually hire their own in-house tech staff to develop custom code and programs to run the analytics, that 50% attach rate now looks even more unrealistic.


Sports is an interesting market and a lot of fun. While a Google or Facebook-style ROI story may not be something this market achieves, companies can create value that’s attractive to a certain set of investors. This market also appeals to those interested in building a business that stands on its own without the added weight of being on an investor timeline chasing valuation expectations.

Most of my career has been spent in digital media, while my personal life has certainly combined the two. For the past several years, I have done quite a bit of research in Sports, consulted with insiders, and engaged in segments such as Youth, Health & Fitness, and Analytics. Hopefully, this post provides useful information and insights, and future posts will deep dive into specific segments. If you have or know of a sports tech project looking for a skilled consultant for advisory, go-to-market, or product management work, please reach out!


p.s. as promised, my favorite sports media:

  • Television – ESPN, FS1, live sports
  • Podcasts – The Herd, Jim Rome, Against The Rules
  • News subscriptions – The Athletic, ESPN The Magazine
  • Fitness subscription – Peloton
  • Books – When Pride Still Mattered, Ball Four, Where Nobody Knows Your Name, The Education of a Coach, Paper Lion, Moneyball
  • Social media – Instagram, Pinterest

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