Venturerock has launched a $75 million venture investment company (VIC) focused on sports tech, a market projected to reach $40 billion by 2026.
“All of the big sports clubs are looking for new revenue streams, so that’s where we come in as an innovation hub,” said Danny Cortenraede, managing partner of Venturerock and co-founder of soccer-focused media company Wannahaves. “We work closely with all of those clubs and see how we can help them.”
Venturerock, based in Amsterdam, was founded in 2018 and focuses on early-stage investments in what it describes as “novel technology infrastructures,” such as blockchain, AI and internet-of-things, and “the first industries of impact,” including fintech, healthtech and smart cities.
The VIC invests in anything related to sports that uses technology, including companies operating in fan engagement, data, wearables and e-sports. The effort is being led by Cortenraede in Los Angeles and Venturerock partner Bob van Oosterhout in Amsterdam.
Venturerock chose to use a VIC structure because it fits its collaborative approach to investing. Cortenraede told Venture Capital Journal the VIC “employs an evergreen structure to continuously work towards the $75 million target.”
It employs a markedly different fee structure than traditional venture funds, charging a 1 percent management fee and 30 percent carried interest. This unusual fee structure is due to the firm’s confidence in its ability to create a higher multiple and its desire to attract a variety of investors, Cortenraede said.
“We closed a deal for $6 million with another VC who invests from Series A and on [and] who’s looking for dealflow in the area we invest in, and they said, ‘OK, we’ll commit $6 million to your fund, and then we can take over those deals when they reach Series A’,” said Cortenraede. “It’s great for us, for them and for the start-ups because they then have the cash lined up for their later rounds. It’s creating a whole ecosystem where we can work together with other VCs.”
In addition to other firms, the VIC is backed by individual athletes, including former professional soccer player Mark van Bommel, former New York Jets cornerback Bryson Keeton, and various other athletes across the NFL, NBA and multiple professional soccer leagues.
The VIC has already completed a $2.2 million investment in an e-sports gaming company, which will be announced later this week. The firm is also “very close” to closing its second and third investments, said Cortenraede.
Venturerock also plans to open Habitat LA in 2023, just ahead of the 2026 FIFA World Cup and the 2028 LA Olympics. The plan is a living and working space for founders which will be “basically a Soho House for sports,” according to Cortenraede. The co-working, co-living space will also be open to athletes, investors and executives from companies and organizations like Nike and the Los Angeles Lakers to help create value and drive innovation for the companies involved in the VIC.
Update: The fifth paragraph of this story was updated with a quote about the structure of the venture investment company.