Funding and dealmaking within the sports-tech sector are reaching new heights, and the increase in mergers and acquisitions is one of the leading reasons why. The investment bank Drake Star reported an industry high in 2022 of over 90 billion USD in dealmaking, with current trends leading many to believe 2023 will break that industry high yet again. 

Sport occupies a unique spot within the business world, as even in a shaky economy, sports overall remain a bright spot for certain investors due to the massive value of media rights, new digital revenue streams, and the expansion of gambling in markets like the US. Funding for many industries over the past few years has been on a slow but steady decline, however, several early and late-stage investors are becoming increasingly interested in the stability and growth presented by investment in sports tech. "The whole market is facing downward pressure, but sports tech is showing signs of strength," Mohit Pareek, a principal on Drake Star's sports-tech deals team, told Insider. "The whole ecosystem is very vibrant." 

The sports-tech industry is getting well-deserved attention from institutional investors and strategics within VC and PE. In 2022 these investors were responsible for 5 billion USD in new funds and have already committed more than 6 billion USD so far in 2023. Much of this new funding and focus within the industry has been centred around the strategic importance of effective mergers and acquisitions within the sports-tech sector. Q2 of 2023 saw a large growth in M&A volume with 105 deals, up from 61 in Q2 of 2022, the most in the sector's recent history. This suggests the potential for further strategic consolidation in the near future. 

Areas like fan engagement, artificial intelligence, ticketing, and venue management are likely to attract significant attention for mergers and acquisitions as well as financing. Although fantasy, esports, and sports betting experienced the highest level of merger and acquisition activity in 2022, the fan engagement and experience sector demonstrated remarkable growth. An example of this momentum is seen in Saudi Arabia's Savvy Games Group, backed by the sovereign wealth fund PIF, which secured around $38 billion in September to establish the region as a global gaming hub. According to a report by Reuters, there are expectations of substantial initiatives from them in the coming year, as Pareek commented.

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