A Sports VC Explains Why the Sports Memorabilia Market Is Set to Surge

• Vasu Kulkarni is the founder of the sports-focused venture-capital firm Courtside VC.
• He’s bullish heading into 2023 on physical collectibles because supply is limited but constantly created.
• He thinks digital collectibles will have a place in the industry when the market is less volatile.

Vasu Kulkarni is betting big on collectibles.

The founder of Courtside VC, a sports-focused venture-capital firm, has led the firm’s investments in companies including Dibbs, a digital-tokenization platform; Bezel, a marketplace for luxury watches; Rare Candy, an NFT marketplace for nerd culture; Infinite Objects, which creates video memories on printed ornaments; and Recur, a platform for companies to create NFTs.

Kulkarni might be a little biased towards collectibles as the owner of a 1984 ticket stub to Michael Jordan’s first NBA game, similar to the one that sold in February for $468,000.

But data also backs up Kulkarni’s broader vision. A July report by Market Decipher estimated the size of the sports-memorabilia market at $26.1 billion as of 2022 and predicted it to rise to $227 billion by 2032. 

“We’ve barely seen the beginning of the sports-collectibles revolution,” Kulkarni told Insider.

Kulkarni is not as bullish on digital collectibles given the market’s struggles of late. His interest in collectibles is anchored to the ironic nature of the sports industry’s physical supply. Physical inventory for collectibles is created with every game, though items are still rare.

“Eighty-two times a year, Steph Curry plays basketball in a pair of shorts, in a jersey, in a pair of shoes — there’s a ball, there’s pieces of hardwood,” Kulkarni said. “You can’t make more than one game-worn jersey of Steph on any given night. You’ve got this constant influx of inventory, but it’s still extremely scarce and limited.”

The relationship between supply and demand in the collectibles industry is what drove the success of one of Kulkarni’s biggest investment wins: Stock X. Courtside VC was in 2017 one of the early investors of the sneaker stock market, which was valued in April 2021 at $3.8 billion.

Courtside VC invests in all facets of the sports space, but Kulkarni leads the collectibles portfolio.

Some of the investments, like Dibbs and Rare Candy, also touch on the digital-collectibles opportunity through NFTs. Kulkarni said he hopes things will settle down eventually and that the collectibles space will grow digitally as well.

“I think we’ve hit some level of NFT fatigue,” Kulkarni said. “A lot of people have conflated Web3 with pictures of monkeys and apes and like stupid stuff like that. That’s not what Web3 and the blockchain is about … NFTs have this amazing ability to create ownership and all sorts of utility that we’ve not yet seen.”

Kulkarni thinks the NFT market will become less of a “money-making mechanism” and more tied to real-world utilities, which could make it less volatile. He cited an example of pairing an NFT with a ticket to a sporting event. Fans would likely go to ticket sites to check the value of the ticket, which would then mark the value of the NFT.

Though Kulkarni still called this a “double-edged sword,” because it puts a ceiling on the value of the products. 

“When something has utility, we as humans I think start to put a value on it, and in our mind there’s a cap on it,” Kulkarni said. “When we go into real-world utility, I think you’re not going to necessarily see these things trade for tens of millions of dollars, but it’ll be a bit more of a stable ecosystem where it’s not just a bunch of rampant speculation.”