• New and emerging leagues are attracting the most VC funding in sports, data shows.
• VC deals tracked by PitchBook show a rebound in funding to US sports startups in 2024.
• Some categories, like media and gambling, raised less money last year than in recent years.

New leagues, women's teams, and youth and amateur sports are reinvigorating the sports startup landscape.

Venture capital funding for US sports startups rebounded last year, with an estimated 119 deals worth a total of $880 million, according to PitchBook data. That value was up 54% from the year before but below the levels from 2021 and 2022 when roughly $1.4 billion poured into the sector each year.

While private equity continues to flow into sports — PitchBook tracked an estimated $9.89 billion worth of deals in 2024, a new high-water mark — the startup space has been choppier. Investors have been looking for surer bets amid the economic uncertainty that's driven high interest rates and fewer exit opportunities for startups.

Venture capital typically goes to startups, while PE firms tend to invest in growth-stage businesses that may be more mature. In sports, PE has gravitated toward major teams and leagues, for example. VCs have backed more sports technology, including betting and fantasy companies, and nascent or emerging leagues.

Early-stage companies with experienced founders and proven traction have attracted big VC investments in the last year. League One Volleyball, which runs a professional women's league and youth programs, announced in November a $100 million funding round from both PE and VC investors. Soccer company TOCA Football said in October that it raised a $100 million Series F round from private investors.

"In the world of sports, adept management teams building technological infrastructure and engaging, experience-driven platforms that play into these tailwinds are capturing investor interest," said Lloyd Danzig at Sharp Alpha Advisors, which invests in sports, gambling, and entertainment.

The hottest startups are new sports leagues and women's sports

New leagues and women's sports grabbed the most VC funding in 2024, according to PitchBook.

In addition to League One Volleyball, two National Women's Soccer League teams and the three-on-three basketball league Unrivaled were among the 10 sports startups that raised the most money last year, per PitchBook. These teams and leagues feature some of the biggest names in women's sports, such as Breanna Stewart, Sydney McLaughlin-Levrone, and Rose Lavelle.

Emerging sports, such as cricket and track-and-field, also attracted new investment.

"Emerging leagues, women's sports, those are the hot areas," said Chris Russo, CEO of Fifth Generation Sports. "People view those as big growth opportunities."

Investors think there is a big opportunity to capture existing fans of these sports in new ways. Some of those could include having shorter events or new methods of engagement.

"Everyone is trying to get to those fans that love the sport," said Mohit Pareek, a principal at Drake Star Partners. "These new leagues are trying to cater to the changing fan behavior."

Russo and Pareek pointed to AI as another key area of innovation for sports, though AI didn't appear to be a key focus among the sports companies PitchBook tracked that had raised the most money last year.

The challenges sports startups face

While some verticals in the landscape are booming, others have taken a hit, including media, content creation, and, to a lesser extent, sports betting.

"Dealmaking has been challenging for a while now," said Chris Lynch, managing director at Citizens, about the sports betting landscape. "Investors have become much more discerning."

Lynch also mentioned that sports-betting deals are taking longer than they did in the past, and investors face more roadblocks.

Danzig at Sharp Alpha Advisors told BI that he's seeing more founders bootstrap their way for longer before seeking external funding.

It's more difficult for founders with an idea and dream to get those first checks.

"Companies with clear traction and growth potential continue to attract investment in a flight to quality, while those lacking indications of success are finding it increasingly difficult to secure financing," Danzig said.

Here are 10 US sports startups that raised significant VC funding in 2024, according to PitchBook:

• Angel City FC: The Los Angeles-based NWSL team announced in July an additional $50 million investment from Disney CEO Bob Iger and Willow Bay, which valued the company at $250 million. PitchBook estimates the team raised a total of $123 million across several Series B rounds last year that included various investors.
• League One Volleyball: The new women's professional volleyball league raised $100 million last year. LOVB also has a youth program.
• TOCA Football: The tech-focused soccer training program announced a $100 million Series F round in September. It has facilities around the US.
• Grand Slam Track: PitchBook estimates the track-and-field startup raised about $39 million in seed funding as of September 2024. The startup said in June that it had secured more than $30 million in financial commitments to launch a new league that plans to bring some of the world's biggest track stars to competitions.
• Major League Cricket: The league aims to bring cricket to American audiences. It has attracted investment from executives like Microsoft CEO Satya Nadella and firms like Iconic Ventures and Madrona Venture Group, CNBC reported in July. PitchBook estimates the league raised $39 million in July.
• On3: PitchBook estimates On3 raised an estimated $36.25 million as of November. The digital platform focuses on high school and college sports, NIL, and recruiting news.
• NJ/NY Gotham FC: The NSWL franchise raised an estimated $34 million in June, per PitchBook. The team won the championship in 2023, and its roster includes US Women's National Team players Emily Sonnett and Rose Lavelle.
• Sofive Soccer Centers: The indoor soccer facility owned by City Football Group raised an estimated $30 million in April, per PitchBook.
• Unrivaled Basketball: The new 3x3 women's basketball league raised $28 million in October. It was founded by WNBA players Napheesa Collier and Breanna Stewart. The league brings in players from the WNBA to compete in the fast-paced game.
• Gameplay Galaxy: The Web3 esports company announced in August that it raised a total of $24 million in seed funding, including a $11 million extension round, VentureBeat reported. Gameplay Galaxy has said it's developing a "decentralized competitive gaming ecosystem."

Angel City FC and LOVB directed BI to recent funding announcements. Unrivaled and TOCA confirmed the funding amounts for their 2024 raises. Sofive and Gotham FC declined to comment. The other companies on this list did not reply or confirm by press time.