Investing in the Tribe: Why Venture Capitalists Are Betting on Fan Engagement Startups

Sports fans are more than just spectators. They’re part of a tribe that transcends boundaries and differences, who are united in support of a sport, team, and players. The dedication of sports fans stands as a cornerstone of community — and a breeding grounds for startups backed by venture capitalists. The AV Sports Fund aspires to be at the forefront of this sector, backing innovative companies leading the way.

In this blog, we’ll explore the dynamic world of startups built around Fan Engagement. And if you want to learn more, view our on-demand webinar where we talk to startup CEOs in the space.

Fan Engagement: Where Passion Meets Opportunity

Fan Engagement is a dynamic industry at the intersection of technology and the love for sports. It’s about creating immersive experiences that resonate with fans, keeping them engaged, and converting that engagement into value.

You might ask, “Is this a niche market?” Hardly. Studies show that nearly 70% of people tune in for live sports. And while traditions sustain communities, new trends and technologies — such as legalized betting to virtual reality, gamification, data analysis, AI, and esports — keep the appeal fresh and growing.

It’s also big money. The global Fan Engagement industry is currently ~$5.24 billion and expected to increase to $27.3 billion by 2033 — at a compound annual growth of 17.9%.

Companies in Our Spotlight

AV has been investing in sport-related companies almost since our inception. In our search for promising investments, we focus on the following key “tells”:

• Founders who are true thought leaders and possess a deep understanding of the challenges they aim to address
• Total and serviceable addressable markets to gauge the potential at scale
• Unique intellectual property/technology that sets a company apart
• Attractive valuation and potential, aiming to “buy low and sell high”

Three Key Areas of Tech Innovation for Fan Engagement

Fan engagement investing encompasses a variety of sectors. To help bring fan engagement opportunities to life, we’ll break down possible tech advances in three key areas: in-venue, out-of-venue, and through platform personalization.

1. In Venue: Technology can maximize ticket sales & increase in-venue sales, while reducing operational costs. Innovation opportunities include:

• Improving fan experience: AI & machine learning can analyze crowd sentiment.
• Avoiding bottlenecks: Crowd management software can reduce parking and ticketing bottlenecks.
• Connecting: IoT can help keep fans connected, informed, and safe.
• Automating: Robots and drones can handle delivery and clean up.

An example of a company in the space is SeatGeek, which streamlines venue operations. SeatGeek has combined a consumer marketplace with innovative primary ticketing box office technology and event-day operating system; and SeatGeek. The company raised $238M in a Series E in 2022 at a unicorn valuation.

2. Out of Venue: Competition for eyes has gone beyond traditional media into social, gaming, and streaming platforms. Innovation opportunities include:

• High-quality viewing: Numerous angles, on-demand replay, and highlights with minimal lag
• Personalizing: Detailed information, statistics, & analysis to enhance the individual’s experience
• Syncing up: Compatible with other services like gambling for all-in-one experience

The Players’ Lounge or TPL (an AV investment) creates a passionate collegiate sports community through a Web 3.0 platform. This platform is more than just a space for fans to connect; it’s a dedicated hub for die-hard college sports enthusiasts to engage, share, and celebrate their passion. In their first year of operation, they proved to be very popular at all of the schools where they launched — surpassing the subscription base of well-established alternatives. They have used this to grow to other teams.

3. Personalized Experience: The use of AI/ML and data analytics can unlock personalized experiences at scale while maintaining the allegiances that drive fandom. Innovation opportunities include:

• Platform customizing: Platforms offer more personalized, better experiences for fans — increasing engagement year-round.
• Targeting: Increased opportunities for organizations, universities, and brands to target, engage, and advertise with fans.
• Accessing exclusives: Fans have increased access to exclusive merchandise, engagement events, digital collectibles, and live event holograms.

Sleeper (another AV investment) fits into both categories 2 and 3. It’s a social fantasy sports platform with a highly active community. The company’s platform connects people across the country, creating a community and friendships via various online leagues and games, enabling users to enjoy sporting events while doing a little wagering and smack-talking. Customization options, besides players, include league types, setup options, fan interaction options, features, and more.

These companies are just a glimpse into the exciting world of Fan Engagement, where innovative solutions are being built to enhance the fan experience and capitalize on the passion of sports fans.

Your Invitation to a Deeper Dive

If you’re an investor with a passion for sports or intrigued by the opportunity to invest in a dynamic and thriving market, we invite you watch our on-demand webinar: “Invest in the Tribe: Fan Engagement – Activating a Ravenous Community.” You’ll hear directly from experts in the field, including representatives from The Player’s Lounge, Sleeper, and other AV sports companies. They’ll share their insights into the industry, their vision for the future, and the opportunities they see.

Whether you’re looking to invest, explore, or learn, this webinar is your gateway to Fan Engagement and the AV Sports Fund.