The 54th minute of play between France and Australia during the 2018 World Cup was nothing special. The French player Paul Pogba was angry after the referee had fouled him and called for a penalty kick.
But at that moment, a historic event for world soccer occurred: The referee didn’t rely on his own judgment but consulted with a video assistant referee, an official whose job it is to watch the game from afar via an array of cameras placed at different angles and offer advice on difficult calls.
Since then VAR has come to be an integral part of the game both globally and in Israel. Along the way it has become the most widely known example of technology being put to use in the service of team sports. VAR has decided which teams have won, but it’s also controversial because it detracts from the fans’ experience. Who wants to wait to celebrate a goal while VAR pores over the images to decide whether it was good?
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It’s just one instance of how coaches’ and managers’ intuition has begun to be replaced by technology. It’s a market with huge amount of potential for tech startups. In 2018, the global sports business was worth $490 billion; it’s forecast to grow at a 5.9% compounded annual rate to nearly $614 billion by 2022.
Israeli tech companies have been somewhat slow in picking up on the opportunity. Accord to figures from Startup Nation Central there are 125 sport-tech startups, a tiny fraction of the approximately 6,500 startups overall in the country.
They haven’t attracted much funding. In 2018, a mere 15 of the Israeli sport-tech startups raised just $90 million, compared with $6.5 billion for the entire startup sector. In the first half of this year, the sector raised $45 million, but $40 million of that was by one company – Minute Media, which develops fan content.
Assaf Ben-Dov, CEO of the Maccabi Haifa soccer team, said he believes the problem facing the sector is that lack of places locally to test innovative ideas. Teams and players need to act as platforms for entrepreneurs testing new technology.
With that in mind, Maccabi Haifa has linked up with Hype Sports Innovation, a global organization based in Israel. Hype operates 12 technology accelerators around the world, including in the United States, Germany, Taiwan and Australia.
Hype counts 250 startup graduates from its global accelerator program that have raised a combined $150 million in the last three years.
Run by Amir Raveh, Ilan Hadar and Bernd Wahler, the latter a former vice president for innovation at Adidas, Hype create partnerships among startups, sports brands, teams and leagues, even with universities engaged in relevant research.
Maccabi Haifa is the first team in Israel to join the Hype network, which operates similar accelerators with teams like FC Koln, Germany’y fourth-largest soccer team. Top soccer teams, like Britain’s Arsenal and Barcelona, have formed their own high-tech accelerators. Barcelona’s sent a delegation to Israel to look for technology.
“Until a few years ago the market was in ‘innovation hibernation’ due to its dispersed structure, but the huge changes in the way the younger generation consumes sports has awakened them,” Hadar told TheMarker. “Major new categories have been created, like electronic sports and use of big data analysis, and there have been breakthroughs in sports apparel.”
Hadar points to the big drop in subscribers to the U.S. sports television network ESPN and viewers turn more and more to the internet and smartphones. That transitions create new business opportunities that can be created through technology.
Hype is now raising capital for its first fund, which is being managed by Uli Becker, a former president of Reebok. Hype Capital has closed the first round of funding that amounts to half of what it hopes with be a $75 million fund. It has already made two investments, one in the Israeli startup Tokabot, which has developed a platform for fan and engagement and sports marketing.
Maccabi Haifa has allocated about 1 million shekels ($290,000) for innovation. Startups joining the accelerator program will get access to its assets, mainly the stadium and players, in order to get a better understanding of what a team needs in a real-world environment.
Startups joining the Israeli accelerator program give Maccabi Haifa and Hype hold an option to buy a 3% stake.
“From my first day in my job, I had been looking to develop a program like this,” said Ben-Dov. “I understood that this had to be part of managing the club.”
His goal is to use technology to improve player performance, strengthen the team’s connection with fans and finally to contribute to sports-tech. “Everyone in the club is involved,” said Ben-Dov. We have a digital communications unit with hundreds of thousands of followers on social networks, a medical clinic, a youth league with 1,200 players and alumni.”
The first group of accelerator startups last year counted 10 companies in areas like virtual reality, smart playing fields and data collection on young players. Two have conducted pilots with the team. This year’s group of startups is dedicated to media, fan engagement, sports medicine and performance measurement. Six of the eight companies are Israeli.
The next crop of startups will be chosen through a different system: Hype and Maccabi Haifa will target startups focused on soccer and specific challenges the team faces, such as admitting spectators to the stadium without a security check and predicting injuries.