Sapphire Sport has closed a $181 million second fund from a group of prominent franchise owners, private equity firms, media entities and publicly traded companies.
New limited partners in the fund include Madison Square Garden Sports, David Blitzer and Arctos Sports Partners. Return investors include City Football Group, Adidas, Sinclair Broadcast Group and AEG.
A part of the Sapphire Ventures platform, Sapphire Sport intends to continue investing across early stage tech businesses that are sports adjacent. It’s a strategy similar to the group’s first fund, a $117 million raise that led to positions in more than a dozen companies, among them Overtime, Tonal and Buzzer.
“The genie is out of the bottle in terms of how younger people, Gen Z and Gen Alpha, are doing things—how they are transacting, how they are communicating, how they are building community,” Sapphire Sport co-founding partner Michael Spirito said in an interview. “We think that their share of the wallet isn’t given enough credit by the economy at large. So we’re trying to invest against those trends.”
Sapphire has already made its first investment out of this second fund—it was part of a $35 million round, announced last year, into online lottery platform Jackpot. Moving forward, it has its eyes on a handful of tech sectors. They include next generation media, gaming, digital commerce, software and health/human performance.
And while sports franchises are a popular new asset in private equity—Arctos, for example, has passive minority stakes in more than a dozen teams—that’s not on the table for Sapphire.
“Technology is disrupting this market, and there are a lot of people investing who, quite frankly, might not have a lot of technology experience or track record,” co-founding partner Doug Higgins said in an interview. “So when we look at Fund II, markets go up and down, but if you have a disciplined long-term approach, you’re going to be able to find companies at the right valuations.”
Sapphire Sport typically makes early stage investments—in the seed to Series B range. The group closed its first fund in 2019 and made 15 investments from that vehicle, Spirito said. It has exited two of those, and won’t add any new companies to the fund, though it has held some capital in reserve for possible tack-on investments. Other companies in that fund include gaming platform GreenPark Sports, e-commerce tech developer Fevo, and virtual sneaker company Aglet.
“Sapphire Sport has created a thriving ecosystem that unites the worlds of sport and entertainment in a way that had never been done before,” Ferran Soriano, CEO of City Football Group, said in a statement. “Through this partnership, City Football Group is able to explore forward-thinking brands and cutting-edge technologies, which strengthens our ability to set new standards within our industry.”
Investors in Sapphire Sport’s second fund:
City Football Group (Manchester City, NYCFC)
Sinclair Broadcast Group (Nasdaq: SBGI)
Adidas (XETRA: ADS.DE)
WISE Ventures (the investment fund of the owners of Minnesota Vikings)
AEG (Los Angeles Kings, Los Angeles Galaxy)
Indiana Pacers ownership
Madison Square Garden Sports (New York Knicks, New York Rangers)
Jeff Vinik (Tampa Bay Lightning)
Stephen Pagliuca (Boston Celtics)
David Blitzer (Philadelphia 76ers, New Jersey Devils, Cleveland Guardians, Real Salt Lake)
Bank of Montreal
Arctos Sports Partners