Giving away money has never been more difficult. In an industry that’s already crowded with competitors all clamoring to fund the next up-and-coming tech company, some venture capital firms are looking for new ways to stay ahead of the curve. While some are exploring opportunities elsewhere, Sapphire Ventures has decided to dig in with big deals in the athletic industry.
In January, the firm announced their new Sapphire Sport fund. They aren’t looking to get into the business of financially backing teams or leagues, that angle is already well-played by those in deep with the industry. Rather, they are interested in exploring early-stage funding options in the technology, media and entertainment businesses with promising sports applications.
The $115 million fund was a year in the making for Doug Higgins, managing director and co-founder of Sapphire. The firm has partnered with several big names in the sports and entertainment industry, including City Football Group, AEG, Adidas, Major League Baseball, San Jose Sharks and the Sinclair Broadcast Group Inc. Higgins has brought in Michael Sporito, head for YES Networks business development and 21st Century Fox regional sports networks, to help run the fund.
“The best venture capitalists need to continue to reinvent and innovate in order to stay relevant,” Higgins said in an interview. “We created Sapphire Sport to serve as a preeminent investment vehicle in a nascent and dynamic area where technology expertise is in increasingly high demand. In partnership with some of the most innovative team owners and sporting brands in the world, we are bringing Sapphire’s venture capital investing capabilities to the global sport marketplace.”
The firm was originally founded in 1996 as the corporate venture arm of SAP SE, a German enterprise software company. The tech giant eventually spun it out as an independent firm with SAP acting as the sole limited partner. In 2014, the business rebranded itself as Sapphire Ventures to establish itself as an independent entity.
Nino Marakovic, CEO and managing director of Sapphire, explained the firm wanted to set itself apart from SAP. In a 2014 interview, Marakovic explained that “we’re tired of being considered a strategic [or corporate] investor. Even if we explain that we’re not strategic – we’re financial – having SAP on the door is too difficult a cognitive leap for many people.”
Sapphire currently has $2.5 billion of assets under management. They have successfully raised $2.6 billion in capital across seven funds. Some of their more notable investments include 23andMe, Fitbit, LinkedIn, Alteryx, and Square. With over twenty companies successfully brought to IPO, Sapphire continues to perform.