Home » A VC firm raised a new $25 million fund for sports, gambling, and entertainment — here’s where it’s placing its bets

A VC firm raised a new $25 million fund for sports, gambling, and entertainment — here’s where it’s placing its bets

Venture-capital firm Sharp Alpha Advisors has closed a new $25 million fund to invest in early-stage sports, gambling, and entertainment startups.

Led by managing partner Lloyd Danzig, the firm’s first $11 million fund from 2021 invested in companies such as the media and production company Almost Friday Media, digital-lottery site Jackpot.com, and ticket marketplace Betcha.

While a tougher funding environment has made it harder for sports and gaming startups to compete, Danzig told Business Insider that the sector still shows the promise it did three years ago. He believes there is a huge chance to introduce new tech ideas to the entertainment industry.

“We believe in the value and power of lean-forward engagement that captures users’ attention and delivers to them a sense of purpose, focus, and connection,” Danzig said. “And we think that at the intersection of sports, gaming, and entertainment is where this type of engagement is most reliably found.”

Sharp Alpha’s new fund intends to invest $1 to $2 million in target ventures — an increase from the average $250,000 offered by its initial fund, Danzig said.

So far, the fund has invested in C15 Studio, the operator and distributor of Formula 1’s new streaming channel, which is on free, ad-supported streaming-TV services like Pluto TV and Amazon’s Freevee.

Danzig said C15 is a great example of the type of companies Sharp Alpha is looking to invest in. It ties into major industry tailwinds, including the shift of sports teams and leagues to direct-to-consumer relationships.

“Every sports team, league, and media company in the world is launching a FAST channel,” he said, referring to free, ad-supported streaming TV.

In sports betting and real-money gaming, Sharp Alpa is interested in “products and platforms that unlock the entertainment side of real-money gaming for the more recreational customer who treats their deposits psychologically as entertainment expenses,” Danzig said.

He also said he’s looking for companies with exceptional founders whose future profits he would want to invest in, no matter what they’re trying to create.

Danzig said the funding environment has been challenging for both startups and fund managers because there are a limited number of partners allocating fewer dollars to venture funds and from venture funds into startups compared to 2021.

Though the process was difficult, Danzig said he is “very fortunate to have our investors from fund one excitedly and enthusiastically re-upping into fund two.”