SBJ/January 9-15, 2017/Marketing and Sponsorship

Courtside Ventures has active first year of dealmaking

Courtside Ventures, the venture capital fund headlined by Cleveland Cavaliers owner Dan Gilbert, George Pyne’s Bruin Sports Capital and WPP, spent its first year investing in 14 early-stage companies, including LiveLike VR, The Athletic and the Drone Racing League.

The idea behind the $35 million fund, which launched in January 2016, was to dive deep into the intersection of sports, media and technology, something it did with investments that ranged from $200,000 up to $1.5 million across the 14 businesses. In most cases, the companies were just a year or two old and they were seeking Series A or seed funding. The investments hit across a number of categories, from audio technology to sports content, gaming and virtual reality.

The Drone Racing League is among 14 investments made by the venture capital fund.
Photo by: THE ID AGENCY
“There’s no shortage of companies in this space — innovation is at its highest point,” said Deepen Parikh, a partner at Courtside who along with Vasu Kulkarni runs CV’s day-to-day business. “A lot of them are focused on the in-stadium experience or selling to teams or leagues, but they’re also looking beyond traditional sports.”

One of Courtside’s investments, LiveLike VR, found its footing quickly in the highly fertile and increasingly competitive virtual reality space. A VR tech platform, LiveLike worked with Fox Sports in 2016 to deliver three college football games, Premier League soccer matches and other events to Android and iOS devices with no headset required. The VR technology makes the broadcasts available in traditional VR as well.

Courtside Ventures was one of several investors — David Stern and Evolution Media Partners, among the others — that helped LiveLike raise $5 million last year.

Courtside also made a big bet on a sports website, The Athletic, which has begun operating in Chicago and Toronto. Courtside is the lead investor in The Athletic’s first round of fundraising, which produced a total of $2.3 million from CV along with Advancit Capital, Bertelsmann Digital Media Investors, Luminari Capital and others.

COURTSIDE VENTURES

Leadership
Ownership group: Bruin Sports Capital, Dan Gilbert, WPP
Non-executive chairman: George Pyne (Bruin Sports Capital)
Partners: Vasu Kulkarni, Deepen Parikh
Advisory board: Brian Bedol, Doug Perlman

First-Year Investments
The Athletic: Subscription sports content
Beam: Live streaming platform for eSports
Drone Racing League: Racing series
ENSO: Wearable pain relief device for daily use
GameCo: Video games for real money in casinos
Kite & Lightning: Virtual reality gaming studio
Lisnr: Ultrasonic authentication technology
LiveLike VR: Live streaming virtual reality platform
Percepto: Computer vision technology for drones
Rebelmail: Interactive email platform
StockX: Stock market for physical goods
Tappp: Prepaid distribution network
Unmute: Live group calling
VSporto: Sports podcasts

The Athletic uses a subscription-based revenue model, charging $5 to $10 per month, rather than advertising. With newspapers cutting back in most markets, The Athletic is looking to fill the void with intense coverage of local sports teams.

Courtside hopes to see The Athletic expand into five or six new markets in 2017.

“They’ve proven to us very clearly that people who are hard-core sports fans are willing to pay for quality local content,” Parikh said.

One of Courtside’s first investments, Beam, a live-streaming platform, has already flipped. Microsoft bought Beam in August.

“We see several opportunities a week — there’s a tremendous amount of deal flow — so we can be highly selective,” Pyne said. “We’ve already seen a good result with Beam.”

Another Courtside investment, the Drone Racing League, has enjoyed coverage on ESPN and Sky Sports for its global series. Pilots wearing goggles that provide a view from the drone fly around courses that grant points based on speed and maneuvering through or around certain targets.

In Courtside’s second year, Parikh said the fund will continue to look for eight to 10 new investment opportunities, while also evaluating deeper investments into businesses with which it already works.

Courtside continues to work from the $35 million that was originally raised and has not sought additional funding yet.

“We’re not volume-driven, so much as we’re looking for the right opportunities where we can provide value,” Parikh said. “The main thing is to stay at the forefront of innovation.”

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