Sports tech and entertainment venture capital fund Drive By DraftKings has closed its initial funding round with $60 million from a who’s who of sports figures, including Dallas Cowboys owner Jerry Jones, New England Patriots owner Bob Kraft and the Dolan family-controlled Madison Square Garden businesses. The Boston-based fund also has an advisory board of well-known figures, including former NFL wideout Larry Fitzgerald and Angel City FC founder Julie Uhrman.
“I think we’re one of the most strategic sources of venture capital in sports tech and entertainment,” said fund CEO Meredith McPherron on a video call. “We’re right there in the center. We have access to a phenomenal base of investors, who are strategic, to our all-star network, who are incredibly well-informed and invested in the space, and to our founding partners.”
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McPherron, a long-time venture capitalist and innovation fellow at Harvard’s Paulson School of Engineering, is the managing partner of the fund. Despite the name, Drive by DraftKings isn’t a part of the publicly traded fantasy sports firm. Rather, according to regulatory filings, it’s owned by DFKS, a joint venture owned in part by DraftKings, its CEO Jason Robins, CFO Jason Park, director Hany Nada and venture capital fund Accomplice, which owns equity in DraftKings and was a VC backer of the business.
Drive By DraftKings aims to invest in companies in various stages of growth across the sports technology and entertainment businesses. “We love that space. It’s multi-billion-dollars in all of its segments and all, with powerful tailwinds behind them,” said McPherron. “It’s a big, growing area with increasing relevance, not just to athletes and not just to avid fans, but it has crossed over to the mass market population. What’s driving growth… is personalization, gamification, increasing amount of interaction with broadcast media—and certainly visual media—with the fan base that seems to want more and more of that, disruptive tech, AI, machine learning and immersive experiences that are redefining the fan experience at large.”
The opportunity drew a lot of interest from investors, with the fund being 20% oversubscribed when it closed its initial capital raise at $60 million, according to Drive By DraftKings.
While announcing the closing of its fundraising round today, Drive By DraftKings already had nearly $57 million in early June, according to a disclosure to regulators at that time. The fund has already made investments in at least 11 entities, including sports betting tech firm Tappp, fishing guide-booking app Guidesly and news site Just Women’s Sports. “We’re responding to the quality of deal-flow we’re seeing,” added McPherron. “We absolutely have the ability to move, and that’s exactly what we’ll do.”
McPherron said investment opportunities ideally should have deep insight and the potential for fundamental change in their sector. Companies also should have a management team that presents some combination of chemistry, focus and ambition to execute on their plan. She cited cryptocurrencies, gaming, NFTs and decentralized finance as exciting areas intersecting with the shift in consumer behavior and sports. “We don’t think it’s hype,” she said. “We think there’s a lot of fundamental change going on.”
Longer term, she cited VR and similar immersive experiences, along with the name, image and likeness framework now open for college athletes, as areas that could present opportunities as well. She cautioned, however, that a lot still needs to unfold in those sectors to present more concrete opportunities for investors.
“We want to get access to great opportunities and then show up and help them to accelerate in meaningful ways,” she said.
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