Tennis Australia’s AO Ventures raising $48m to back tech startups in sports, health and media

AO Ventures, the venture capital arm of the Australian Open and Tennis Australia, is raising US$30 million ($48 million) to invest in technology-led startups that are innovating in the fields of sport, entertainment, media and health.

Backed by seasoned investors such as Mark Nelson from Caledonia, Tanarra’s John Wylie, Melbourne-based businessman Mark Healey, Ashok Jacob from Ellerston Capital and the Denholm family office, Wollemi Capital Group, the fund is planning to announce its debut investments in the first quarter of this year.

AO Ventures says it has already exceeded its first-close target of US$20 million with the capital raising round expected to be fully completed after this year's Australian Open.

Described as a groundbreaking move for sports globally, the AO Ventures strategy is aimed at homing in on high-growth startups that tackle some of the world’s major challenges. It also provides Tennis Australia with opportunities to partner with these startups as a client to help drive their commercial growth.

“The challenge for any early-stage company is building market credibility,” says Tennis Australia CEO Craig Tiley.

“Our model as a client and investor leverages the strength of our TA and AO business and brands to drive awareness, reputation and revenue for our portfolio companies, ultimately boosting returns on our investments.”

The fund’s focus will be on technology companies tackling challenges where Tennis Australia or the Australian Open can provide strategic capital and access to its network.  A key tenet of the fund is the potential for investments to scale beyond tennis or sport, growing market size and returns.

Tennis Australia says the Australian Open’s profile in the sporting arena globally, and the depth of the fund’s financial backers, provides startups with a “unique platform to grow”.

AO Ventures, which is open to sophisticated investors, has also attracted support from venture capitalist Brad Feld and the Gnanalingam family that own Queens Park Rangers.

"The fund is further enhanced by a unique warrant program, AO Startups, that pilots technologies across our business prior to investment,” says Tiley.

“AO Ventures brings together the advantages of corporate venture capital with a traditional investment fund model, uniquely offering 75 per cent of capital to private and strategic investors. The final close is anticipated soon after the winners hold the trophies aloft at this Australian Open.”

The US$30 million fund, which is led by general partners Todd Deacon and Machar Reid, plans to make early-stage investments into about 20 startups globally with investments typically ranging from US$300,000 to US$1.5 million.