VC Kara Nortman wager early on girls’s sports activities, and now she’s creating the market

When its season ended early this month, Angel Metropolis FC completed eleventh out of 13 groups, a disappointing outcome for the Los Angeles soccer franchise that enterprise capitalist Kara Nortman co-founded in 2020. However the season’s struggles inform solely a part of a a lot bigger story that’s reshaping how traders take into consideration girls’s sports activities.

Regardless of its lackluster on-field efficiency, Angel Metropolis itself has grow to be a case research (together with actually, inside Harvard Enterprise College) in find out how to finest assemble a girls’s sports activities property. The workforce’s movie star possession group, together with Natalie Portman and Serena Williams, has helped generate practically unprecedented buzz. The franchise has additionally been savvy about sponsorships, breaking information earlier than gamers kicked a ball.

“We went from zero to $30 million in income. We bought out video games. We constructed one thing individuals didn’t suppose was potential,” Nortman mirrored in an interview final month, pointing to Angel Metropolis’s business success from the very outset of the workforce’s formation. “That actually led to the formation of Monarch.”

That business success, not trophies, turned the blueprint for Monarch Collective, the $250 million fund Nortman launched in 2023, which has grow to be the primary funding automobile centered solely on girls’s sports activities. Whereas its origin story could also be rooted in a workforce that has but to win a playoff recreation, Monarch’s portfolio and affect have expanded far past Angel Metropolis’s coaching facility in Thousand Oaks, California.

The fund now holds stakes in three different Nationwide Ladies’s Soccer League golf equipment: San Diego Wave, Boston Legacy FC (debuting subsequent yr), and its latest funding, introduced earlier this month, FC Viktoria Berlin. The deal for 38% of the German membership, makes Monarch the primary overseas investor to amass a stake in a German girls’s soccer workforce.

It’s a various assortment that displays Nortman’s conviction that girls’s sports activities have reached an inflection level, no matter any single workforce’s fortunes. The numbers help her optimism, too.

“The general males’s sports activities market globally is estimated to be about half a trillion {dollars},” Nortman explains. “The ladies’s sports activities market, after we began Monarch in 2023, was regarded as about half a billion {dollars}. It’s now nearer to $3 billion.”

Tapping into that progress requires a distinct playbook than males’s sports activities, Nortman says. It’s not a easy rinse-and-repeat. “Like, what number of males’s workforce house owners are fascinated with parachuting Sephora packing containers from rafters? Or having at [a New York] Liberty [WNBA game] a Fenty cam for placing in your [Fenty] lipstick, or Angel Metropolis having a Good day Kitty collab night time the place individuals can’t determine find out how to get their palms on the merch earlier than it sells out?”

Angel Metropolis’s progressive strategy to advertising and partnerships helped it construct a lot pleasure that within the fall of final yr, energy couple Bob Iger and Willow Bay acquired a majority stake in it for $250 million, making it probably the most invaluable girls’s sports activities franchise on the earth.

For Nortman, who left Upfront Ventures and extra conventional enterprise capital to focus full-time on girls’s sports activities, Angel Metropolis’s business achievements have continued to validate Monarch’s thesis. Although there’s present stress – definitely within the sports activities press, a minimum of – between Angel Metropolis’s enterprise success and its on-field efficiency, the workforce has inarguably confirmed that girls’s sports activities can generate critical income with the proper items in place.

Now, as with every profitable new endeavor, the query is: can the momentum final? Nortman is acutely conscious that girls’s sports activities has seen promising moments evaporate earlier than. She incessantly references a hanging historic parallel from 1920, when 60,000 individuals confirmed up in Liverpool, England, to observe the Dick, Kerr Women play soccer, which is an even bigger crowd than most Premier League video games draw at the moment. The subsequent yr, the English Soccer Affiliation banned girls from taking part in, and the game primarily disappeared for many years.

“Everybody will get to get up and grow to be the discoverer of girls’s sports activities after they do,” Nortman says. “But it surely takes constant, laborious work to get that to play out into consistency.”

That tough work, she argues, requires extra than simply using waves of consideration from breakout stars like Caitlin Clark or Angel Reese. It calls for systematic funding in infrastructure, governance, and operations – the unglamorous work of constructing sustainable companies.

That is the place Monarch’s strategy diverges from typical enterprise capital. Fairly than making passive bets on dozens of startups, Monarch is taking concentrated positions in a handful of groups and leagues, then getting deeply concerned in operations. The fund describes its technique as “venture-like markets” with “progress fairness or non-public equity-like” threat administration.

“We present up alongside management house owners and add plenty of operational worth,” Nortman explains. The aim is to assist groups attain breakeven or profitability on their core operations, positioning them to profit as higher-margin media income grows.

Monarch’s funding curiosity prolong past soccer. The fund is extra broadly centered on what Nortman calls sports activities with “no product-market threat,” which means established codecs with confirmed audiences.

“Is that this a sport individuals like to observe on their laptop or tv?” she asks. “There are participatory sports activities, like pickleball, however are individuals going to take a seat dwelling and create an occasion out of watching it?”

Certainly, whereas Monarch has stakes proper now in 4 “soccer” golf equipment, it’s , too, in girls’s basketball, golf, and tennis – sports activities with substantial media income potential, together with current infrastructure.

The agency’s present restricted companions embrace Melinda French Gates, former Netflix executives, and different rich people, and curiosity in its mission appears to be rising. For one factor, Monarch’s debut fund of $250 million is considerably greater than the $100 million that Nortman and her co-founder – Jasmine Robinson, a former investor with the sports-, media-, gaming-, and fitness-focused progress stage agency Causeway – initially deliberate to boost. She says the elevated measurement displays the market’s speedy maturation throughout Monarch’s fundraising interval.

“Once we began elevating the fund, 9 out of 10 conversations have been, ‘Yeah, we don’t suppose [women’s] basketball is mostly a factor,’” Nortman says, recalling a “lot of skepticism round it.” Then got here Caitlin Clark’s meteoric rise, the WNBA’s record-breaking viewership, and abruptly basketball turned the most popular sector in girls’s sports activities.

That rising curiosity validates Nortman’s thesis that girls’s sports activities funding isn’t about discovering the one good workforce however about supporting an ecosystem the place a number of franchises can thrive. Some will win championships. Some will battle competitively however succeed commercially. The hot button is having sufficient capital and operational experience distributed throughout the market to climate particular person setbacks.

Already, Angel Metropolis seems to be inspiring different possession teams. “You began having different groups – Kansas Metropolis, Bay FC, Washington D.C. Spirit – with female-led possession teams are available and present they may construct an actual P&L,” Nortman notes. Whether or not deliberately or not, Angel Metropolis turned a template.

As girls’s sports activities enters what seems like a sustained increase interval — the Golden State Valkyries simply performed their first WNBA subsequent season, the NWSL is increasing, media rights offers are rising — Nortman stays cautiously optimistic about whether or not this second will show completely different from previous surges in curiosity.

The important thing, she argues, lies within the fundamentals: sturdy league governance, proprietor dedication, infrastructure funding, and constructing real neighborhood connections. Media consideration creates alternative; operational excellence makes it sustainable.

“Each spike is a chance to create a constant expertise round it,” Nortman says. “You must take a look at all of the underlying standards to see the place it’s prone to stick round.”