Courtside Ventures has closed a total of $100 million for its third early-stage venture capital fund focused on sports, collectibles, wellness and gaming.
Fund III investors include a globally diverse group of industry leaders across professional sports including
team owners, athletes and industry executives, said Kai Bond, partner at Courtside Ventures, in an interview with GamesBeat.
“I think it’s fascinating to see sports go from something that people play right into a participatory entertainment and lifestyle culture. And it really permeates through all parts of tech and entertainment, not just looking sports by itself. It is parallel to gaming in that way,” said Bond.
The limited partners in the fund include the ownership groups of the Atlanta Hawks, Golden State Warriors, Philadelphia 76ers, Cleveland Cavaliers, Charlotte Hornets, Monumental Sports (Washington Wizards, Capitals, Mystics), LAFC, Atletico Madrid, and DC United. Minority owners across NBA, MLB, NHL, EPL have also invested as well as key industry figures Larry Fitzgerald and Shaquille O’Neal.
Additionally, public corporations that have invested in Fund III include Dicks Sporting Goods among others. The majority of Courtside’s Fund II investors returned and are joined by more than 50 new relationships. The close brings Courtside Ventures’ total committed capital to over $200 million.
Since its launch in 2016, Courtside has continuously done well with its investment approach. The firm has investments in more than 80 vertically-focused companies across 8 countries.
Fund I has already returned 1.61 times in proceeds to LPs, ranking it in the top 10% of all venture funds in their vintage in terms of net DPI. Notable investments since inception include The Athletic (acquired by The New York Times), Beam (acquired by Microsoft), StockX, 100 Thieves, WinZO, VEO, Freeletics, FanCraze and Paceline, among several others.
“Courtside Ventures has a track record of successfully backing and accelerating culture-shaping companies that are driving innovation. With Fund III we will continue to invest with conviction in great founders and disruptive ideas in our key verticals of sports, fitness, collectibles and gaming,” says Deepen Parikh, partner at Courtside Ventures, in a statement. “We will also continue to put a strong emphasis on global investment opportunities as our vertical focus and learnings from the U.S. market are applicable to larger and higher growth regions. We remain heavily committed to our portfolio companies, all of which are well positioned to maintain resilience in a market where calculated execution is key.”
Courtside Ventures has already begun deployment of Fund III, partnering with early-stage founders. The investments include Hypothetic, Matchday, Mojo, Xpoint, Jackpot.com, Venly, Planet Mojo, Bezel, Fliff, Fermat and Fello.
“The Courtside Ventures team has been invaluable to the early success of our business,” said Jackpot.com CEO Akshay Khanna, in a statement. “Their hands-on approach ensures companies like ours with bold ambitions together have access to the resources, tools and partners we need to scale, navigate times of market uncertainty and ultimately advance our respective industries. We are humbled to call them an early investor, one who believes in our vision with conviction, and we are proud to be included in this new fund, which has so many thought leaders as investors.”
Bond said the company hasn’t done any esports deals in some time, even though it is at the intersection of sports and gaming. One of its earlier investments was 100 Thieves which recently laid off about 30 employees. Additionally, it was an investor in Beam, which was acquired by Microsoft, renamed Mixer and then was subsequently shut down. While the esports audience has grown, it has had trouble monetizing fans. Unlike sports franchises, esports leagues have struggled to secure media rights deals. Because of this inability to grow revenue, Courtside has not made further investments in esports.
“We’ve made a dedicated and conscious effort to look at other parts of the ecosystem that we think are better revenue-generating opportunities from a venture return profile,” Bond said.
Historically, the company has put money into real-money gambling, such as Jackpot.com. Bond believes that real-money wagering and sports betting will be a big opportunity. He expects real-money wagering to grow from a $70 billion business to $300 billion over time. Other areas include Web3, generative AI and things like the SaaS infrastructure for technology businesses. Sports collectibles are also a big market.
The fund has taken a more global approach as well, investing in startups in Nigeria, Brazil and Mexico. In India, the company looked at sports-focused opportunities such as cricket and its intersection with mobile phones.
“We’re taking a look at the opportunities in generative AI, like a company that takes to the assets and turns them into 3D,” Bond said. “We’ve tried to identify the core technological transformations that are going on. What are the verticals we’re operating in? And where’s the cultural zeitgeist and appetite for consumer products?”
As for blockchain games? Bond said that his general perspective on the gaming market over the last 20 years is that the biggest outcomes always come at this intersection of a new form of distribution and a new type of monetization. The promise of Web3 is in the same space.
“We are believers in Web3 in the long term,” Bond said. “The challenge is getting it to millions and doing it with a frictionless experience.”
Bond said the firm hopes to make a lot of investments over the next 18 months to two years.
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