An Orlando-based fund that launched with the goal of raising and investing $30 million has a few more deals up its sleeve this year.
The Lake Nona Sports & Health Tech Fund likely will invest in three or four more startups before the end of the year, Principal Thomas Rudy told Orlando Inno. That means a few companies, and potentially some startups from Central Florida, have a chance at landing investment dollars from the fund in the next six months.
LeAD Sports, which originated in Berlin, set up its first U.S. accelerator program in Orlando’s Lake Nona community in 2020, partnering with Tavistock Group to launch the fund a year later. Since its launch, the fund already has made seed investments in six companies, five of which participated in the leAD Lake Nona Sports & Health Tech Accelerator.
That means companies that go through leAD’s six-month program in Lake Nona have an inside track to landing capital from the fund. This money can be critical for early-stage tech companies, because it funds them as they scale while also providing business expertise and industry connections.
LeAD’s sports and wellness technology accelerator program receives 600-700 applications for each cohort, only accepting about 1% of businesses. The program accepts companies from around the world, but it has a few specific attributes it prioritizes.
The main factor leAD considers when looking at applicants is the strength of the team, Rudy said. From there, leAD takes into account if Lake Nona’s attributes — ranging from a collection of hospitals to sports facilities to a fitness performance center — can add value to the business, Rudy added.
Meanwhile, leAD shifts the types of businesses it seeks based on what’s going on in the market. While it always is focused on three verticals — fan engagement, connected athletes and health/wellbeing — leAD emphasized other types of companies in this most recent cohort. That includes firms focused on the red-hot metaverse concept, as well as software firms less likely to be rattled by worldwide material shortages than hardware-focused firms.
LeAD recently welcomed its third and newest cohort of startups to its innovation space in Lake Nona. The six businesses include firms from the Netherlands and Orlando, working on technologies ranging from athletic wear made from algae to a glucose-monitoring patch.
Of course, many more investment deals are ahead after 2022. Within the next three years, the fund is expected to make another 10-14 investments, ending with a portfolio of roughly 24 companies, Rudy said. He declined to say how much money the fund has deployed since it was launched.
After a historic year for U.S. venture capital activity in 2021, deals slowed in the first quarter of 2022, PitchBook and the National Venture Capital Association reported.
“Although fundraising momentum remained strong, we saw a softening across dealmaking and a significant drop off in IPO activity,” PitchBook founder and CEO John Gabbert said in an April 14 report. “We expect to see the full impact of market volatility illustrated in the data over the next couple quarters."
Still, metro Orlando companies collectively raised at least $816 million in the first five months of the year, according to company announcements, U.S. Securities and Exchange Commission filings, the National Venture Capital Association and PitchBook. That’s substantially more than local firms raised in 2021 ($361.6 million) and 2020 ($378.4 million) combined.
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