Four years after its launch, Drive By DraftKings continues to grow. According to its website, the multi-stage venture capital firm primarily invests in sports tech and entertainment companies. In addition to DraftKings, its namesake gaming company, Drive’s founding partners include:
- Accomplice
- Boston Seed Capital
- General Catalyst
All three venture companies specialize in startups and early investment.
A unique approach from Drive is the creation of its All-Star Network. It consists of former pro athletes like perennial Pro Bowl wide receiver Larry Fitzgerald and sports executives like Theo Epstein, Sam Kennedy, and Andy Miller. The All-Star Network acts as consultants and experts in the sports industry.
The combination of venture capital and sports expertise attracted early interest from investors. In 2021, Drive announced that it raised $60 million in its first investment fund in 2021. The company added that the fund was oversubscribed by 20%, and notable investors included:
- The Kraft family, owners of the New England Patriots.
- The Jones family, owners of the Dallas Cowboys.
- Madison Square Entertainment, owner of the new MSG Sphere in Las Vegas.
- Todd Boehly, owner of soccer club Chelsea and co-owner of the LA Dodgers.
DraftKings Eyes the Skill Gaming Space
The Drive portfolio includes an eclectic mix of 16 companies at the moment. Drive bills itself as being focused on “SportsTech and Entertainment.”
Unsurprisingly, several of the companies it has invested in are involved with digital sports media in some way, though fitness-related technologies also feature. Another recurring theme in the portfolio is the real-money digital skill game space.
DraftKings’ main rival, FanDuel, has also taken an interest in skill gaming. However, the companies have taken different approaches. While DraftKings is kicking the tires on the skill games sector through its investments, FanDuel opted to launch its own product, FanDuel Faceoff, last year.
Faceoff comes by way of a partnership with GameTaco. Its catalog is a mix of GameTaco’s off-the-shelf titles and sports-themed exclusive games created by FanDuel.
It’s unclear whether DraftKings’ investments are made with the potential for a similar future partnership in mind. However, it’s clear that the company is committed to investing in developing content in-house, with over 60 original games in its catalog to date.
It would not be surprising to see DraftKings branch out from its DFS roots into other forms of skill gaming, whether independently or in partnership with one of these startups.
Drive’s investment portfolio includes three such companies.
Papaya Gaming
Papaya develops real money skill games only available on mobile devices. Papaya’s most popular games include Solitaire Cash, Bubble Cash, Bingo Cash, and 21 Cash. All games are free, but players can participate in tournaments against each other to win cash prizes.
Papaya’s games are among the most popular on both iOS and Android stores. According to its website, Papaya’s games have over 21 million downloads and host millions of tournaments annually.
Monkey League
Drive calls Monkey League “a combination of FIFA and chess.” It’s a strategy-based soccer game where players can earn non-fungible tokens (NFTs) by playing against each other. The game’s characters and stadiums are also NFTs, and users can earn additional NFTs by being spectators.
Drive was one of the first investors in Monkey League (initially called Monkey Ball), together with the now-defunct Alameda Research. Alameda was a crypto trading company founded by FTX CEO Sam Bankman-Fried.
Burn Ghost
Burn Ghost is an arcade-like play-to-win platform using a sweepstakes model. Users play skill games using arcade tokens for a chance to win sweepstakes tickets by posting higher scores than the competition. They use those tickets to enter sweepstakes for the chance to win cash prizes. It has three games at the moment:
- Ghost Run, an endless runner
- Slayground, a top-down survival shooter
- Pinball
Notable Sports Technology Investments by Drive
There’s a reason why Drive assembled its All-Star Network. According to market research and management consulting firm MarketsandMarkets, the sports technology industry is expected to reach over $40 billion in revenue by 2027. Drive has invested in several such companies.
Fevo
Fevo is a provider of e-commerce software for entertainment brands. According to its website, it has over 750 partners. The website shows that the number has doubled in the last two years. Partners include teams from all major sports, including the NFL, NBA, MLB, NHL, and MLS.
Fevo is also a software provider for music festivals like Lollapalooza and Bonnaroo.
Tappp
Tappp creates technology that gives users “the flexible way to watch and bet.” That means it allows users to bet on live events on their screens in real time without missing a moment. This year, Fast Company recognized Tappp as one of the top 10 most innovative companies in sports.
Tappp also develops payment options, including gift cards. Interestingly, one of the company’s major payment partners is DraftKings’ competitor BetMGM. Through its partnership with Tappp, BetMGM’s gift cards are available in retail locations like 7-Eleven convenience stores.
Nextiles
Nextiles creates sports apparel with integrated sensors within the textile. The software in the fabric tracks data like performance without additional equipment like watches or straps. The company says its products are focused on human movement, data collection, and quantification.
Nextiles has launched sleeve products used in tennis and college baseball and has partnered with a sleeve manufacturer for MLB. The NBA has also become an investor in the company.
Investments in Health and Finance Quick To Pay Off
Although perhaps a little more distant from DraftKings’ core business, some of the most successful investments that Drive has made are in the health and e-commerce sectors.
Whoop
Biometric data tracking company Whoop is perhaps the highest-valued company from Drive’s portfolio. The company develops a device that can be worn as a watch or in specially-designed apparel. It measures metrics like sleep, strain, and recovery.
In 2021, Whoop raised $200 million in a funding round, valuing the company at $3.6 billion. Since then, it has launched multiple upgrades to its product, introduced new languages, and entered retail stores. It was also on the Fast Company World’s Most Innovative Companies list of 2023.
Vidmob
Vidmob started as a marketplace connecting marketers with video creators. Since then, it has transformed into a creative marketing technology provider and partnered with companies like Google, Meta, Amazon, and TikTok.
Drive has invested in Vidmob on two occasions. In 2022, the $110 million raised suggested a company value of $500 million. Since then, Vidmob’s leadership said they expect to reach a $1 billion valuation this year.
Cardless
Cardless develops software for credit cards and helps companies launch branded credit cards. Some of its partners include Liverpool and Manchester United soccer clubs, mall operator Simon, and LATAM Airlines, which is the largest airline in Latin America.
Last year, the company was valued at over $300 million, and Forbes included Cardless founders Scott Kazmierowicz and Michael Spelfogel in its 30 under 30 list for finance in 2022.
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