VCs Back Pro Sports Ownership: Thrive Capital, Collaborative Fund Lead
▼ Summary
– Collaborative Fund has taken a stake in D.C. United and Audi Field, marking another entry by venture capital firms into professional sports ownership.
– This move follows Thrive Capital’s pioneering efforts with Thrive Eternal, which previously invested in the San Francisco Giants and purchased the Lakers.
– Historically, sports ownership was dominated by individual tech fortunes like Vinod Khosla’s and private equity firms such as Sixth Street and RedBird.
– Unlike Thrive’s permanent capital vehicle, Collaborative is using its early-stage fund to treat the soccer club as infrastructure and a consumer product.
– Founder Craig Shapiro views the investment as leveraging D.C. United’s long-standing fan base amidst growing momentum for American soccer.
Venture capital firms are increasingly moving beyond traditional startup investments to acquire stakes in professional sports franchises, a shift that challenges historical norms of ownership. Collaborative Fund, a New York-based generalist venture firm with approximately $1 billion under management, has secured an investment in Major League Soccer club D.C. United and its stadium, Audi Field. This move marks the latest entry into a growing trend where venture capital is being deployed for pro sports ownership, a pathway recently opened by Thrive Capital.
The landscape of sports investing has traditionally been dominated by two groups: individual tech billionaires and private equity giants. For instance, Vinod Khosla recently agreed to purchase the Seattle Seahawks for a record $9.6 billion, following his family’s acquisition of a stake in the San Francisco 49ers. These transactions represent personal wealth plays rather than institutional venture strategies. Similarly, private equity firms such as Sixth Street, Ares, RedBird, and Arctos have held significant positions in teams ranging from the Boston Celtics and New England Patriots to AC Milan and various MLB clubs. Apollo, another major player, has focused primarily on sports financing rather than direct ownership.
Thrive Capital disrupted this model by launching Thrive Eternal, a permanent-capital vehicle designed to hold iconic cultural institutions. The fund initially took a stake in the San Francisco Giants and later purchased the Los Angeles Lakers outright for $12.5 billion, with former Disney CEO Bob Iger joining as a co-owner. While Thrive created a standalone entity specifically for these long-term holdings, Collaborative Fund is taking a different approach. It is investing out of its standard early-stage fund, treating the D. C. United stake not merely as a financial asset to appreciate, but as strategic infrastructure.
Collaborative Fund founder and managing partner Craig Shapiro articulated this unique thesis in a memo shared with TechCrunch. “A franchise is the ultimate consumer product,” he wrote. He argued that D. C. United’s status as one of MLS’s original clubs provides access to a deep-rooted fan base. Shapiro highlighted several tailwinds supporting American soccer, including the upcoming World Cup, the LA Olympics, and rising youth participation rates. Additionally, the deal includes rights to a future expansion team in Baltimore and leverages the club’s ownership of Audi Field and surrounding real estate in Washington, D. C., along with a talent development pipeline in Loudoun County, Virginia.
This strategy positions the stadium as a live showcase for Collaborative’s existing portfolio. As a backer of fitness tracker maker Whoop and beverage brand Olipop, the firm envisions integrating these products directly into the game-day experience. Whoop wearables could activate fans, while Olipop drinks might become part of stadium concessions. Shapiro views the predictable foot traffic of tens of thousands of attendees as a valuable distribution channel. In an era where AI makes digital experiences feel synthetic, he believes live events are becoming increasingly precious.
While the primary goal may be ecosystem integration, the financial upside remains substantial. Sports valuations have surged dramatically. Inter Miami’s franchise value doubled within two years of Lionel Messi’s arrival. The average MLS club value has risen approximately 134% since 2019. D. C. United’s valuation has climbed from $35 million in 2008 to $785 million today, a figure that includes Audi Field and associated real estate. If Shapiro’s assessment holds true that a franchise serves as both a cultural institution and a high-growth asset, the investment could yield significant returns. The transaction remains subject to approval by Major League Soccer.
(Source: TechCrunch)