It is estimated that the sports tech sector will reach US$ 31.1 billion by 2024. To support this exponentially growing market, leAD Sports & Health Tech Partners and InStudio Ventures have partnered up to form The Draft, a U.S.-based seed and venture capital Sports tech Fund.
The pilot fund will raise US$5 million and will first invest in approximately three start-ups per year. The focus of the fund will be on the areas of fan engagement, health and wellbeing and esports.
The sports industry has evolved a lot over the years with advancement in technology. Many sports tech startups are popping up nowadays, especially after the pandemic. “The sports and health tech ecosystem has changed fundamentally over the last 12 months and we already had that same shared belief and understanding of the market pre-COVID. From a sports tech angle, the U.S. by far is the largest market and the most supportive one.” said Aaron Naisar, leAD investment manager.
The Draft is willing to invest in startups from various countries, but it is expected that 90% of selected start-ups will be US-based. The fund will make the investments on a milestone-based system rather than an up front investment.
“We won’t say, ‘Here’s 500K, take the money and do it.’ We’ll work in specific phases and they need to hit KPIs and objectives and we’ll invest 75K, 150K and then the rest. We believe it’s a much better way to work together with startups than just give them funding. We go much more beyond funding and have a high involvement,” said Danny Cortenraede, InStudio Ventures CEO.
The selected startups will also get a chance to participate in leAD’s Lake Nona Academy. They will receive advice, pitch training, workshops and 1-on-1 sessions in a smart and connected community based in Orlando. The startups will also be able to take advantage of Lake Nona’s Verizon 5G broadband capacity. While the start-ups selected by leAD participate in a six-month program, The Draft’s start-ups will get an extended 18-month program.
“What we see is 75% of entrepreneurs are failing, it’s super difficult to build a successful company. What we’re doing is getting a higher involvement and almost being a co-founder, we don’t want to lead the company, but it’s to join and share our experience and access to corporations, leagues and clubs and be the bridge between the start-up and the organizations that can help them scale,” said Danny Cortenraede.
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