On Wednesday, venture capital firm Drive by DraftKings announced that it raised its first venture fund, which it will use to invest in the booming sports tech and entertainment markets. The oversubscribed fund totals $60 million, and includes investments from prominent industry leaders like New England Patriots owner The Kraft Group, Madison Square Garden Entertainment Corp., and Todd Boehly, who owns part of the LA Dodgers, the LA Lakers and the LA Sparks.
As you may have guessed, Drive by DraftKings counts sports betting giant DraftKings as one of its first backers, along with General Catalyst and a handful of other local venture firms. The company was founded back in 2019 in an attempt to take a bite out of the global sports tech market — an industry projected to be worth more than $40 billion by 2026. And it has already invested in some prominent rising stars, including Cardless, Muxy and Whoop, a rapidly growing health monitoring startup here in Boston that hit a $3.6 billion valuation over the summer.
Drive by DraftKings also works with what it calls an “All-Star Network” of high-profile figures of the sports and entertainment industry, who support the firm’s investment strategy. Notable members include three-time Olympic ice hockey medalist Hilary Knight, Boston Red Sox CEO Sam Kennedy and MLB executive Theo Epstein. Most of these members also invested in this latest $60 million fund.
“I joined Drive by DraftKings’ all-star network to be connected to the people shaping the future of the industry,” Epstein said in a statement. “Technology is changing sports and entertainment so rapidly and if you aren’t close to that change, you’re falling behind.”
Of course, this news is coming at an especially busy time for founding partner DraftKings, which has become a staple of the Boston tech ecosystem. The company made its public debut in April of 2020 through a merger with SBTech and blank check company Diamond Eagle Acquisition Corp., and has since expanded into everything from igaming to pop-culture betting.
DraftKings is also not the only local standout to dip its toes in the venture capital space. Just last week, HubSpot Ventures — the VC arm of Cambridge-based software startup HubSpot — launched a new $100 million fund to invest in B2B SaaS companies.
Meanwhile, Drive by DraftKings says it will be focused on four key areas with this first fund: human performance, sports and gaming, media and fan engagement, and data analytics and monetization.
“Through our relationship with DraftKings, as well as other iconic brands in sports and gaming via our limited partners and advisors, we are well positioned to accelerate the most ambitious new ventures at the frontier of these industries,” Meredith McPherron, the firm’s CEO and managing partner, said in a statement. “We are proud and excited to have assembled this roster of prominent investors. Not only do they embrace our vision to facilitate innovation in sports tech and entertainment, they also provided the capital to join our mission.”
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