Youth Volleyball Membership Community Helps Launch of New Professional League – Sportico.com

League One Volleyball (LOVB, pronounced “love”), an organization that operates a community of youth volleyball golf equipment and is launching an expert indoor ladies’s league after the 2024 Paris Olympics, just lately raised $16.75 million in Sequence A funding. Verance Capital, together with David Blitzer’s Bolt Ventures, ex-Carlyle investor group VetOne and Alex Cohen’s multi-family workplace Heights LLC led the spherical. Excessive-profile buyers Billie Jean King and Kevin Durant, together with veteran sports activities investor Elysian Park Ventures, additionally participated.

The investor collective is assured in LOVB’s potential to construct a sustainable, U.S.-based, full-season, professional volleyball league. Volleyball is the highest highschool sport within the nation by participation, and greater than 16,000 followers just lately attended a collegiate matchup in Madison, Wis. “There’s a good tailwind round ladies’s sports activities usually [and] volleyball particularly,” Lyle Ayes (CEO, Verance Capital) mentioned. Ayes can also be vice chairman of each the NWSL’s Houston Sprint and MLS’ Houston Dynamo.

This challenger league alternative is “distinctive and differentiated” due to the community of youth golf equipment; they’re money flow-producing and might function a financing car for it within the early years. “Different startup leagues that don’t see traction quickly sufficient are confronted with having to lift extra rounds of funding and dilution to proceed working,” Ayes mentioned. “On this case, the golf equipment can present optionality on financing.”

Whatever the professional league’s success, buyers ought to have a income and profit-generating asset that may be bought and may convey a optimistic return on their capital.

JWS’ Take: Verance participated in an early financing spherical for LOVB in 2021, earlier than co-leading this Sequence A, which reveals the expansion stage capital agency’s perception within the league. “We thought there was a possibility for a youth sports activities rollup in women’ volleyball, just like what has been performed in soccer and different sports activities,” Ayes mentioned.

The truth is, League One’s progress over the past two years has fortified the thesis. LOVB has signed 32 golf equipment throughout 17 states, and collectively, these golf equipment have practically 100,000 members. A few of the newly raised capital will go in the direction of rising the membership and member rely.

“[Company] income is scaling properly, [and] the variety of golf equipment which can be a part of the ecosystem is scaling properly. League One Volleyball has turn out to be a model that youth golf equipment need to be related to,” Ayes mentioned.

“There isn’t any scarcity of golf equipment on the market which can be subscale and would profit from being half of a bigger group like League One Volleyball. We expect there is a chance over the subsequent 12 months to greater than double the footprint.”

Funding {dollars} may also go in the direction of rising the golf equipment (assume: extra courts and programming, back-office instruments and admin help), launching the Professional League and driving engagement and consciousness of the LOVB model through “content material, media and merchandise choices,” Katlyn Gao (CEO, League One Volleyball) mentioned. The corporate expects to double its income in ’23.

League One Volleyball isn’t the one entity consolidating youth volleyball golf equipment at scale. 3Step, backed by Fiumi Capital (previously Fertitta Capital) and Juggernaut Capital Companions, is taking an analogous strategy throughout a mess of sports activities, together with volleyball.

However LOVB’s efforts in constructing a unified grassroots-to-pro system inside the sport is exclusive. “That tangible connection of belonging between the youth and the professional [league] is key to our ecosystem strategy,” Gao mentioned.

A strategic acquirer may finally swallow up League One Volleyball’s membership enterprise and provides buyers the returns they search. Nevertheless, if LOVB continues on its present trajectory and efficiently executes on its consolidation technique, the corporate’s cash-flow profile and income may additionally turn out to be engaging to PE corporations.

League One has a profitable membership enterprise. So why there’s a need so as to add skilled league that carries the next danger profile? The thesis is that the professional league will probably be symbiotic with the youth sports activities focus.

“Golf equipment are excited to be part of the LOVB rollup as a result of they just like the halo impact of a coming skilled ladies’s league,” Ayes mentioned. “It’s higher to accumulate golf equipment whenever you’re not simply competing on {dollars} however competing on model.”

The established membership volleyball enterprise will help fund the professional league’s launch. Whereas most startup professional leagues are reliant on exterior fairness and/or debt capital to maintain themselves early on, LOVB may have the optionality to lean on the working money circulate generated from the membership community to finance and improve its league till it reaches profitability.

Whereas that mitigates the chance across the launch of the skilled platform, the hope is the league can shortly stand by itself. LOVB Professional intends to generate revenues through sponsorship gross sales, the licensing of media rights and maybe the sale of franchises down the highway.

The junior golf equipment may also give LOVB Professional a “vibrant group of engaged followers and shoppers of the game in addition to the infrastructure and houses for the professional groups,” Gao mentioned. The community of youth golf equipment ought to present a expertise pipeline and expanded skilled alternatives for the professional gamers, too.

Standing up a U.S.-based ladies’s skilled volleyball league isn’t any straightforward process. However Ayes argues the case for it to achieve success is just like the underwriting on U.S. males’s and ladies’s soccer investments. “There’s a large backside of the pyramid of youth participation and a large tailwind of world demand for the game.”

League One isn’t the one entity with the imaginative and prescient; Athletes Limitless additionally has an expert ladies’s volleyball league. However the two should not essentially competing with each other. AU’s short-season format may doubtlessly complement LOVB’s extra conventional league schedule. “There are in all probability ways in which the 2 organizations can work collectively,” Ayes mentioned.