Many of the most pressing business issues in the sports industry are also questions of technology. Sports organisations of all sizes are looking to see how new innovations can make existing processes more efficient or unlock new opportunities in performance, fan engagement or revenue generation
Any league, club, venue, or sports-adjacent business risks being left behind unless they are willing to embrace sport’s increasingly tech-driven nature.
This transformation is being supported by big tech companies accustomed to working with some of the biggest names in business. But a burgeoning sports-specific technology ecosystem is also providing tailored services and developing new innovations to solve some of sport’s biggest challenges.
Early and mid-stage companies play a crucial role in this ecosystem, but equally important is the community of investors that help startups accelerate the commercialisation and development of their technologies.
After a challenging period, there are signs that the investment climate is improving and there is genuine excitement about a new wave of technologies looking to usher in further revolution in sport.
But which technologies should the industry be keeping a particular eye on during 2024 and what is the funding outlook? SportsPro asked a panel of experts for their views.
- Jean-Baptiste Alliot, chief strategy officer, LaSource
- CiCi Bellis, managing director, Cartan Capital
- Charlie Greenwood, founder, Sports Loft
- Kara Nortman, managing partner, Monarch Collective and founder, Angel City,
- Mohit Pareek, principal, Drake Star Partners
- Michael Proman, managing director, Scrum Ventures
- Josh Walker, chief executive and co-founder, Sports Innovation Lab
Technology’s influence on sport will only grow in the coming 12 months (Image credit: Getty Images)
What trends will define sports technology in 2024?
Kara Nortman: Globalisation. Sports properties looking to find growth are increasingly focussed on international markets but many fans will never have the chance to attend a [live event] in person. New distribution models and digital platforms have made content more and more accessible, and both viewership and international rights values have grown. With that comes the need to deliver better products for the international fan. We’ll see this manifest in language and translation technology, ad delivery and content creation this year.
We will also see increasing opportunities to innovate across media distribution and content, especially in emerging sectors such as women’s sports. Ironically, women’s sports and emerging sports have a more flexible rights environment and the opportunity to leverage the best of what’s already out there, which may be a better incubator for systems-changing tech.
Josh Walker: A huge focus on fan data is driving the industry forward. Brands are demanding much more visibility into the performance of their sponsorship and sports marketing spend, and that visibility will only come from better fan insights and measurement. This need for fan data is also driven by the industry’s need to go direct-to-consumer. Lots of teams and leagues now have diversified their revenue with new products and services – many have beefed up their loyalty programs as well. The fuel for all these initiatives is a smarter approach to collecting, analysing, and activating on consumer data and insights.
“There will be a greater focus on identifying technologies that deliver genuine tangible outcomes, whether that’s better experiences for fans, assets for sponsors, or new capabilities for broadcasters. It won’t be enough for something to be really clever – it needs to make a difference and it needs to be robust and able to operate at scale.”
Charlie Greenwood, Founder, Sportsloft
CiCi Bellis: We expect to see integrated data and video analysis tools that merge wearable data with video analysis to gather deeper insights into athlete performance. Augmented Reality and Virtual Reality (AR and VR) technology will continue to push the boundaries of fan engagement. [There will also be] increased investment and innovation in tech solutions designed specifically for female athletes and sports. Meanwhile the democratisation of sports technology will mean affordable wearables and accessible data analysis tools will make sophisticated training methods available to the masses.
Charlie Greenwood: There will be a greater focus on identifying technologies that deliver genuine tangible outcomes, whether that’s better experiences for fans, assets for sponsors, or new capabilities for broadcasters. It won’t be enough for something to be really clever – it needs to make a difference and it needs to be robust and able to operate at scale. Essentially, technology buyers are going to apply more scrutiny and demand clear use cases before they purchase.
We also expect the sports industry to leverage its unique ability to capture consumer data. We often hear how the sports industry lags behind other sectors such as retail and travel but the affinity that supporters have for their teams and their willingness to share their details and opinions is perhaps only matched by music artists. We expect there to be an increasing trend where brands prioritise deals with teams and leagues due to their ability to capture data.
Women’s and youth sports could provide a sandbox for tech innovation in 2024 (Image credit: Getty Images)
Which sector within sports tech will see the greatest growth over the next 12 months?
Mohit Pareek: We believe wearables and performance tech will be an area of focus thanks to improving AI algorithms and tech capabilities. These will enable analytics teams and sports organisations to leverage more sophisticated data to enhance athlete performance, training methods and reduce the risk of injuries.
Michael Proman: The gameday experience will continue to evolve as venues look to attract fans before and after the actual event. It’s very much analogous to the way airports have fundamentally changed the way people approach travel. Events used to be a very transactional experience: you go, you cheer, you leave. As venues continue to develop premium spaces and inject the latest technology and culinary trends into the fan experience, fans are literally lining up to get access as early as possible and rights holders and venue operators will continue to place an emphasis on making stadiums and arenas an innovation playground.
KN: Women’s sports and youth sports will see the greatest growth this year. We hope to see acceleration within a women’s sports ecosystem that deserves more athlete and fan-focused innovation. Sports tech companies fully recognise the ‘size of the pie’ in youth sport and we’ll see both growth and consolidation here as many look to compete in this fragmented and increasingly busy space with the combination of the authenticity and execution to stand above the rest in markets where mission increasingly stands out as much as the specific technology solution.
CG: We’re seeing large numbers of teams and leagues re-evaluate their membership propositions, moving away from a ticket access-based approach towards identifying a common belonging between fans and connecting fans together. We think there is a significant opportunity for technologies that can help deliver on these new membership propositions given software development isn’t a typical core competency of sports teams. So looking to partners who are focused on building the best solutions for membership and online communities is going to be key.
Secondly, we think there is a big opportunity to help brands target the activation of their sponsorships much more effectively whilst also amplifying their activations to a larger audience. Effectively, this means reducing wastage and using the budget to reach more of the right people. Marketing technologies that can enable activations to be targeted but also deliver at scale are going to be in demand.
What’s the most overhyped sports tech trend or product heading into 2024?
JW: Automated logo detection in live sports is a solution looking for a problem. If I’m a brand, I certainly care about the number of impressions we generate from signage and product placements in a venue, but I’m much more interested in outcomes. A brand can have millions of impressions of their logo, but if fans don’t buy their product or service, what’s the point? Integrated sponsorships will take the place of impression-based ROI measurement.
Michael Proman: Endemic technologies: 2024 will see continued budget cuts that will disproportionately impact startups that have been overly-reliant on industry-specific revenue. These companies, which are overly exposed to a particular vertical and customer base will struggle to attract new capital as investors look for multi-faceted solutions that can be deployed across numerous industries.
Jean-Baptiste Alliot,: One of the most overhyped sports tech trends are AR and VR-based immersive experiences and the supposed decline of the metaverse. While there is considerable promise in this space, the full realisation of these technologies and their impact on sports experiences is still a work in progress. Although many hope the Apple Vision Pro will be a game changer, the maturity of these technologies seems more plausible as a long-term prospect rather than something likely to happen in 2024.
Will it be easier for sports technology firms to secure funding this year?
JW: Sports tech has had its moment. The hype surrounding the industry’s digital transformation peaked in 2016 or 2017 and no pure play sports tech start-up will find it easy to raise funding in 2024. Private equity and growth equity firms will continue to fund the growth and consolidation in the sports media and sports betting space, but startups will need to tell a much broader industry reach story. Sport can still be a great place to start a tech company, but there needs to be a broader industry application to unlock capital investment.
CB: Mixed opinions on this. Investment may shift towards proven business models and technologies with clear ROI, while riskier or speculative ventures could face tougher scrutiny.
KN: Yes, although not with the same terms, values, and types of partners that we’ve seen in the past. While there is plenty of capital available, interest rates, tech industry layoffs, and the broader macroeconomic environment mean that investors will continue to think cautiously about how and when they deploy.
In the long run, the funding environment will reward founders that are able to be thoughtful about how they manage their cash needs and line up to solve a problem that is aligned with long-term purpose.
We’ll also see an increasing amount of funding come from strategic investors. Teams, leagues, and athletes will be especially active as they look to own their own audiences and can offer unique access for these early-stage companies. Technology in sports requires strong alignment with the actual product on the pitch or on the court. Technology can drive new audiences, but usually will do so if the community in stadium anchors the community out of the stadium. Technology alone can not hit heartstrings or change behaviour the same way it can in other areas of tech that are purely digital.
“As the IPO market opens up and additional M&A occurs, the in-flows will trigger a broader willingness to deploy capital at scale. However, investors will be more and more price-sensitive and startups that aren’t willing to reset valuations in-line with market conditions will continue to struggle to raise capital.”
Michael Proman, Managing Director, Scrum Ventures
Mohit Pareek: Last year was a robust year from private placement standpoint with close to US$7 billion raised by sports tech companies. However, more than three quarters of total financings were for early stage companies and investors were more cautious in 2023 due to global macroeconomic factors and therefore we saw smaller number of late stage financing compared to 2022. As we enter 2024, there is a record amount of capital available for deployment, underscoring strong investor interest in the sports tech ecosystem. We predict a strong year of investment activity as the industry is set to experience rapid innovation across segments. Early-stage companies are expected to get strong investor backing while mid to late-stage financings will gradually pick up as we progress through the year.
Michael Proman: Yes – so long as founders are willing to be reasonable about valuation. As the IPO market opens up and additional M&A occurs, the in-flows will trigger a broader willingness to deploy capital at scale. However, investors will be more and more price-sensitive and startups that aren’t willing to reset valuations in-line with market conditions will continue to struggle to raise capital.
CG: The best companies will still get funded, even if not at the very high multiples of previous years. However startups that are not solving a genuine market need, or creating a new opportunity, are going to struggle. There are also going to be a large number of ‘down rounds’ as companies that previously raised at significantly inflated values need to go back to the market.
JA: Securing funding for sports technology firms in the current landscape may take some effort. While some firms with innovative offerings may find it relatively less complicated to attract investment, most will encounter sincere obstacles. The ease of securing funding hinges on several factors, including the niche of sports technology, the product or service’s uniqueness and potential market impact, the prevailing economic conditions, and investors’ risk tolerance.
How will AI (and specifically generative AI) impact the sports technology space this year?
CB: We expect generative AI to personalise fan experiences, be able to predict and prevent injuries, create realistic sports simulations, personalise training content, and automate content creation and distribution. AI-powered scouting and talent identification are also potential applications
Mohit Pareek: Even though we predicted AI (specifically generative AI) to be a trend to watch for in 2023 we were amazed by the remarkable growth and pace of adoption witnessed over the past 12 months. We expect this growth to continue and be a driving force in some of the key sports tech verticals. These include athlete performance, injury analysis and prediction, coaching, in-venue fan experience, and content creation and delivery.
CG: We expect to see the adoption of a number of sports-specific AI offerings that leverage data models on top of services such as ChatGPT and integrate with relevant applications such as ticketing or data analytics platforms. These companies will make AI more usable and provide reassurance to organisations looking to benefit from AI but are naturally cautious about the risks.
JA: AI and generative AI promises to enable a wide array of applications that will reshape how sports organisations operate. A diverse set of use cases will delve deeper into player performance and team strategies, with AI-powered analytics platforms aiding coaches in making informed decisions for optimal performance.
AI’s versatility can be leveraged for content generation distribution and to enhance marketing practices in a way we’ve never seen before. AI-generated content, from automated highlights to personalised fan experiences, will heighten engagement and viewership by tailoring content to individual preferences. Furthermore, AI’s role in injury prevention and rehabilitation will advance, with predictive analytics identifying risks and generative AI designing personalised prevention programs.
The critical aspect to keep in mind is whether sports organisations directly build their own AI models or use APIs to existing models developed by the likes of OpenAI. These will work in the short term but create a dependency in the long run.
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