Sapphire Ventures Draws Who’s Who of Sports to $115 Million Fund
(Bloomberg) -- On the field, the New York Jets and San Francisco 49ers are competitors. Off the field, their owners are teaming up in a new $115 million investment fund by Sapphire Ventures.
The NFL franchises aren’t alone. The anchor investor is City Football Group, which owns Manchester City and the New York soccer club NYCFC. Other backers from the world of sports include entertainment giant AEG, Adidas AG, Major League Baseball, the San Jose Sharks, Sinclair Broadcast Group Inc., and former Fidelity fund manager Jeff Vinik, the owner of the Tampa Bay Lightning.
The fund, called Sapphire Sport, already has an eclectic mix of investments, from a company that makes wall-mounted gyms to Phoenix Labs, a video-game developer. Sapphire isn’t rushing to invest in teams or leagues -- its backers are already deep in those. It’s looking for technology, media and entertainment businesses with potential sports applications, said Doug Higgins, managing director and co-founder of Sapphire Ventures.
“Sports has everything a venture capitalist dreams of -- it’s a massive market being upended by technology,” Higgins said. “And the technology that disrupts this industry won’t necessarily come from within this industry.”
The fund’s first investment, for example, came after it explored the growing business of competitive video gaming, or esports. While many rushed to invest in esports teams, or new leagues, Sapphire backed Phoenix Labs, a studio looking to create the next Fortnite.
Raising the fund has been a yearlong process for Higgins and Palo Alto, California-based Sapphire, which has more than $2.5 billion under management. They started with a goal of raising $100 million and eventually capped the fund at $115 million.
“We saw this same hole in the market -- there weren’t that many people investing in early-stage companies, bridging the gap between seed rounds and private equity interest,” Spirito said.
For the investors, Sapphire fund is an opportunity to make money and gain insight into technology that could help their businesses. That could be anything from ticketing and stadium improvement to new media startups that help teams reach elusive younger fans.
“We have been looking for the right investment collaboration opportunity, which would also have the potential to help us identify new and innovative fan offerings and amenities,” said New York Jets President Neil Glat.
Another company in the fund’s portfolio is Tonal, which makes a wall-mounted gym system. Founder Aly Orady was attracted to the fund’s diverse backers.
“They bring more than just capital to the table; they provide the expertise and connectivity,” Orady said in an email.
Higgins and Spirito said they’re continuing to speak with potential investors from around the sports world, and have their sights on more.
“There will be another fund,” Spirito said. “We haven’t come close to speaking with everyone who will be interested in joining us over time.”
©2019 Bloomberg L.P.