New report reveals ongoing growth of Australia’s sports tech industry

Australia’s sports tech industry is now worth $4.25 billion, equal in value to the nation’s fintech sector, according to the Australian Sports Technologies Network (ASTN) annual Sports Innovation Report for 2023.

Released today by Australia’s peak body for sports technology and innovation, the report builds on the findings from ASTN’s inaugural report in 2022, and shows that 758 companies make up Australia’s sports tech ecosystem, now employing 13,438 people.

Showing that sports tech sector is now head-to-head with Australia’s well established fintech sector, the report finds that Australian sports tech company creation has grown by 11.8% per annum in the 10 years since the inception of the ASTN in 2012, when there were only 284 companies.

It also identifies 115 companies as industry leaders including well-known Australian brands including 2XU, SWEAT, VULY and PTP - with these companies generating around 87% of the total revenue of the industry.

Introducing the report, said ASTN Chair, Dr Martin Schlegel advised “rapid growth in sports tech is reshaping the sports industry as we know it, and unlocking new revenue streams. The second edition of the ASTN Sports Innovation Report takes a deeper dive into the emerging sector - to help inform industry leaders, and provide new growth opportunities for sports tech startups.

“Australia’s sports tech sector has proved it has now moved out of its nascent stage as it goes head-to-head with Australia’s booming fintech sector. Australia continues to prove that it’s one of the world’s leaders and long-term pioneers in sports technology and innovation.

“The sector has exceeded all expectations in this year’s report as the sector surpasses $4 billion in revenue.”

Growth of the sector in Australia has been in tandem with the exponential growth of sports tech worldwide, with an estimated worth at US$22.9 billion in 2022, and expected to grow by 13.8% per annum to more than US$41 billion by 2027.

New wave of technology set to emerge ahead of Brisbane 2032 Olympics
Australia’s sports tech sector is predicted to continue its successful trajectory and sustained growth with a new wave of technologies emerging in preparation for the Brisbane 2032 Olympics and Paralympic Games.

Dr Schlegel notes “we are building one of the world’s most advanced and integrated sports tech ecosystems in the lead up to several major events in Australia’s sporting calendar over the next decade.

“We can expect to see new technologies from AI, big data analytics to mobile, non-invasive wearable sensors and smart materials being deployed across the sports tech market verticals. As a result, new companies will be formed providing opportunity for further growth of the sector.”

10 trends driving the sector
The report identifies 10 major themes that provide strategic opportunities for the industry derived from conversations with industry leaders, startup businesses and government.

Dr Schlegel goes on to say “the 10 emerging sports tech themes we’ve identified - from ESG to smart apparel - have accelerated digital transformation across leagues, teams and federations globally in recent years. To continue the sector's momentum, Australia’s sports tech firms need to stay abreast of global trends and take advantage of these opportunities to reap the rewards over the next decade.”

Sports tech cluster identified on Australia’s eastern seaboard
The report identifies the formation of a rapidly growing sports tech cluster along Australia’s eastern seaboard with 90% of sports tech companies headquartered in Victoria, NSW and Queensland.

Victoria continues to lead the way as the backbone of Australia’s sports tech sector, with 41% of all sports tech companies based in Victoria.

Explaining that there’s still tremendous opportunity for other states - representing only 10% of the industry - to ride the sports tech wave and get ahead of curve in the lead up to the 2032 Olympics, Dr Schlegel adds “there’s still an enormous amount of untapped opportunity in the local sports tech ecosystem. Australia’s sports tech sector is manifesting its position as an ideal incubation and validation market with our global counterparts acknowledging the capability and quality of sports tech solutions derived here.”

Key Report Findings:

• Sports tech employment by state: Of the 13,438 people employed in sports tech, ASTN estimates that nearly half (47%) of sports tech jobs are based in Victoria, followed by NSW (27%) and Queensland (18%).

• Sports tech location: The majority of sports tech companies are based in Victoria (41%), New South Wales (31%) and Queensland (19%) - with a concentration of activity in the three key metro areas including Melbourne, Sydney and Southeast Queensland.

• M&A activity has slowed: There has been a decline in mergers and acquisition (M&A) and capital raising activities in FY23 compared to FY22 - due to significant tightening of access to investment capital, driven by rising interest rates and inflationary pressures.

Mergers and acquisition activity has slowed to around $500 million in FY23, compared to over $1 billion in FY22.

• ASTN companies are paving the way: Sports tech companies mentored by ASTN programs now employ 270 people, and thirty of the 70-plus alumni startups from ASTN’s Accelerator program have raised a total of more than A$60 million in capital over the last few years.

• Mass Participation & Active Living market dominates: ASTN has found the majority of companies (56%) provide their products and solutions to the Mass Participation & Active Living market, followed by Business of Sport & Entertainment market (46%) and Professional & Elite Sport (14%).

• ICT continues to be the largest technology category: The majority of companies develop their solutions using Information and Communication Technologies (ICT) (66%), followed by Advanced Materials (23%) to build their products.

Emerging sports tech trends present new opportunities
ASTN’s top 10 themes are:

1. Artificial Intelligence (AI)
2. Active Living, Fitness and Wellness
3. Web 3.0, Metaverse, Gaming and Blockchain
4. Virtual Sports of Tomorrow 
5. Smart Apparel, Equipment and Wearables 
6. Environmental, social, and governance (ESG) investing
7. Sports Digital Ethics, Privacy and Security
8. Women in Sports tech
9. Investment and Venture Capital
10. Global Trade and Business Matching.

Dr Schlegel concludes “we look forward to working closely with our robust network of start-ups, scaleups, established sports tech companies, government and the wider sports community - to take Australia’s sports tech sector to its next phase of growth by providing leadership in the development and commercialisation of new products and innovations at the intersection of sports and technology.”

The report is being officially launched at ASTN’s member event today (Wednesday 24th May 2023) at its headquarters in Cremorne, Victoria.

Click here to download the full Sports Innovation Report for 2023.

Images: SWEAT (top) and ASTN Chair Dr Martin Schlegel (below).