Thrive Capital Pioneers VC Involvement in Professional Sports Ownership; Collaborative Fund Ramps Up Engagement
Collaborative Fund, a generalist venture capital firm based in New York with about $1 billion in assets under management, is making an investment in the soccer team D.C. United and its stadium, Audi Field. This marks the firm’s entry into professional sports ownership, following a trend initiated by Thrive Capital.
Recently, Joshua Kushner’s Thrive Capital introduced a new initiative named Thrive Eternal, aimed at acquiring “iconic franchises and cultural institutions” for extended periods. This vehicle is funded by many of Thrive’s existing investors, and it recently acquired a stake in the San Francisco Giants. Shortly afterward, former Disney CEO Bob Iger, now a Thrive partner, co-owned the Los Angeles Lakers by purchasing them for an unprecedented $12.5 billion.
Typically, investments in professional sports have been made through personal wealth from individual tech entrepreneurs or by private equity firms. Vinod Khosla and his family, for example, recently agreed to purchase the Seattle Seahawks for $9.6 billion, also taking a stake in the San Francisco 49ers alongside OpenAI chair Bret Taylor. This exemplifies an investment strategy focused on personal wealth accumulation, a trend we’ve seen repeatedly.
Private equity firms have a history of investing in major sports franchises, such as Sixth Street, which has stakes in the Boston Celtics and the New England Patriots; Ares, which owns part of the Miami Dolphins and financed Chelsea’s stadium plans; RedBird, which owns AC Milan and a minority position in Fenway Sports Group; and Arctos, which has various minority stakes in sports leagues. Apollo is a newer player that has primarily engaged in financing deals rather than direct ownership.
In contrast, both Thrive and Collaborative have chosen different paths for sports ownership. Thrive’s approach involves creating a dedicated vehicle with permanent capital intended for long-term investments in trophy assets, while Collaborative is using its existing early-stage fund to make this deal, treating it less as a traditional asset acquisition and more like an opportunity for infrastructure investment.
In a memo to TechCrunch, Craig Shapiro, founder and managing partner of Collaborative Fund, explained that this investment extends the firm’s current activities. He referred to franchises as “the ultimate consumer product,” highlighting D.C. United’s significance as one of the original teams in Major League Soccer, with a fan base that has developed over decades.
Shapiro pointed out favorable trends in American soccer, including a recent World Cup, the upcoming LA Olympics, and increasing youth engagement in the sport. Additionally, he emphasized D.C. United’s ownership of Audi Field, the talent development opportunities in Loudoun County, and rights for a future team in Baltimore.
The vision that Shapiro shared at a recent event indicates that Collaborative’s goal is not solely to own a valuable sports team, but to leverage the team’s potential. For instance, with investments in fitness technology like Whoop and health beverage brand Olipop, Collaborative is considering how to integrate these products into the game-day experience. The steady foot traffic at Audi Field is seen as an opportunity to connect with consumers in a meaningful way, especially as authentic experiences grow increasingly valuable in an AI-driven world.
While Shapiro does not focus on valuations in detail, it’s worth noting that team values have been climbing significantly. The value of Inter Miami has nearly doubled since Lionel Messi joined the club; the average MLS franchise value has increased by approximately 134% since 2019, and D.C. United’s valuation has grown from $35 million in 2008 to $785 million today, considering its ownership of Audi Field and the adjacent properties.
If Shapiro’s assertion that a franchise represents “the ultimate consumer product” proves correct, it could be a wise investment for Collaborative Fund. The deal, however, still requires approval from Major League Soccer.
