The Drive by DraftKings leadership team and I recently hosted our investors, portfolio companies and partners for our 2nd Annual Meeting, held in our hometown of Boston at the iconic Fenway Park. After a full day of learning, connecting and reflecting on where we are and where we are going, the sense of optimism we already felt in our portfolio companies was further reinforced.

You see, we believe strongly that there is massive potential in our core sectors of Gaming, Fandom and Human Performance; that this is one of the most attractive times in the last decade to deploy capital; and that tough markets are where great companies build to win the long game.

Opportunities Abound

In the last year alone, the market has invested over $20B in our core sectors. With no signs of the momentum slowing down, we see a few key drivers of growth as having the greatest continuing impact.

Gaming continues to be a juggernaut, growing in excess of 10% annually driven by several key factors:

• The ongoing legalization of sports betting (approximately 50% of Americans now have access);
• Mobile phone penetration is enabling greater access and adoption for both real money and skill gaming; and
• The onset of Generative AI is poised to revolutionize the traditional gaming studio model and the way we will enjoy games in the future

We see a massive opportunity in Fandom driven by the shift to streaming as direct to the consumer services edge into live sports broadcasting; Gen AI tools drive new ways for consumers to create, consume, and distribute personalized content; ongoing form factor improvements in mixed reality; and continued innovation in eCommerce that will create new shopping experiences with sports, culture and entertainment.

In Human Performance, our quest for greater agency over our minds and bodies deepens as wearables, computer vision, and smart garments are on the rise adding intelligence and analytics to our athletic performance and everyday health and wellness. AI recommendations and predictive analytics engines will deliver a personalized coach to everyone’s pocket while advances in neurotech are poised to unlock more organic human potential from our brains.

The Time Is Right to Invest in Innovation

Patience is a virtue. In this business, it’s perhaps most true when it comes to capital deployment during volatile times. Over the last year, recessionary concerns, geopolitical uncertainties and the war in Ukraine, Fed tightening, bank failures, and the collapse of the crypto markets combined to make public markets anything but stable.

The past year has certainly demanded patience while remaining open and agile around opportunity. Our discipline paid off as private market valuations corrected and entry points became more attractive for early stage companies raising capital. We are now at one of the most attractive times to deploy capital in the last decade coupled with the strong tailwinds of a major technology innovation boom still underway.

Build with Discipline

The last 12 months has been a build cycle for many companies. Building during a challenging operating environment is all about focus and smart capital allocation (balancing growth and burn). Leaning into the tough times inspires a focus on efficiency; adding value every day; and managing metrics vs. hype. Companies building quality products and experiences will see a payoff in markets demanding the best experiences whether in gaming, fan engagement or human performance.

New tools are emerging every day. Technology and markets continue to move forward. People move forward. And great companies built on fundamentals will move forward, separate from the pack, and are better-positioned to show long-term category-defining impact and market leadership.