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Good morning 👋
We’re officially back. God bless Trump, and God bless the US.
Switching gears - today we’re talking niche sports and private equity.
Let’s get into it.
P.S. 💰 Are you a full-time investor AND do you want to get paid more?
Today’s highlights
PE is betting big on niche sports
Coatue is raising $1b for AI bets
14 ideas from Buffet and Munger
Chart: Distribution > product
TOP
Niche sports = big PE money 💰
Traditional sports have been loved by private equity for some time now, but niche sports like padel, pickle, and volleyball are having their moment.
PE firms are seeing massive untapped potential in these sports, some funds have already started taking advantage of the fan bases, media contracts, and revenue-generating assets to turn niche leagues into substantial assets.
CVC Capital Partners invested $300 million in the International Volleyball Federation in 2021, which has since transformed into what is known as Volleyball World.
Qatar Sports Investments acquired the professional padel league, World Padel Tour in 2023.
MCH Private Equity invested in in All For Padel - an Adidas-licenced equipment brand.
Why it matters: Venture oftentimes moves downstream from PE investment, so when PE investors start making moves like this, venture investors start to take notice.
As niche sports rise in popularity, there will be investment opportunities for savvy investors looking to ride the adoption wave.
Here are some questions we would be asking:
What booking system (if any) are being used for court reservations?
Is there a dominant brand used by the top players in the sport?
Who is the ICP for the sport?
What is the advertising demand by other companies to reach that same ICP?
In what markets is the sport popular today?
In what markets, can the sport expand to?
What happens next: Expect more private equity firms to start testing the waters in less conventional sports markets.
As PE capital flows into these areas, niche sports may well transition into mainstream cultural fixtures, attracting more lucrative media contracts and building broader ecosystems around them. Pickleball used to be niche - now it one of the most popular sports in the States. (We predict padel to pass pickleball’s popularity in the next five years.)
This could result in venture and growth equity investors to explore adjacent opportunities in sports technology, wellness products, and even media production companies as they position for growth in an emerging market with proven fan loyalty and limited incumbents.
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LINKS
💡 14 Ideas from Buffett and Munger I Don’t Want to Forget: David Sentra posts
👷♂️ Audience Building 101: Alex Lieberman posts his framework for thinking about and building a killer audience
🗞️ 15 Lessons From 30+ Years in Newsletters: CJ Childers has learned these lessons along the way
🖥️ Steve Jobs (Make Something Wonderful): Listen to this Founders Podcast
🤲 AI for Startups: Andreessen Horowitz makes the case of Little Tech and Big Tech jointly recognizing policy choices made now will determine whether the U.S. can continue our long and proud history of fostering innovation and seeing startups, small businesses, and entrepreneurs succeed
TWEET
HEADLINES
Coatue is raising $1B for AI bets (TechCrunch)
Robotics AI startup Physical Intelligence raises $400M in Bezos, Thrive-led round (Pitchbook)
Fewer Small And Midsize Venture Funds Are Closing This Year (Crunchbase)
Election Wargames: Tech and Politics Try Their Hands at Detecting Voting Threats (WSJ)
MEME
RECS
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POLL
What sport will be more popular in the US in five years?
Thanks for reading this far and giving us a little bit of your attention this week.
Feel free to unsubscribe whenever this stops becoming valuable to you.
- Clay
RESULTS
Here are the results from our poll question in yesterday’s piece:
Where are you spending most of your capital over the next five years?
🟩🟩🟩🟩🟩🟩 Software investments only (5)
🟨⬜️⬜️⬜️⬜️⬜️ Hardware investments only (1)
🟨🟨🟨⬜️⬜️⬜️ Even split between software and hardware investments (3)
🟨🟨⬜️⬜️⬜️⬜️ Something else (2)
11 Votes
