Hawks Ventures, the $50 million venture capital fund the Atlanta Hawks launched in March for minority startups, has made its first investment: $750,000 to ARENA Innovation Corp., a fitness technology company.
Hawks Ventures invests in early stage companies, primarily seed or the next fundraising step, Series A, that are minority founded or led. The fund is not focused on sports-related startups, but on companies that improve customer experience.
“We’re looking for companies and products and services that make the world more fast and convenient, more personal and helpful, or more fun and unique,” said David Garcia, senior vice president and managing director for Hawks Ventures. “When you look at ARENA and what it does, it really hit all of those buckets.”
The Hawks investment will allow the startup to grow after debuting the ARENA Platform — a strength training device that can generate up to 200 pounds of resistance — last year.
“We build a box, a really smart box, and you can stand on it, there’s a cable below your feet, and you can tell it with your phone, ‘I want 40 pounds,’ and it’ll give you 40. And if you’re a big strong person, you can tell it, ‘I need 200 pounds,’ it’ll instantly give you 200 pounds. And if you don’t know what you’re doing in the gym, you can take a class, and it will set the weights and it’ll count the reps,” said Krisna Bhargava, co-founder and CEO of ARENA.
The equipment is advertised at a price of $2,495.
Hawks Ventures is focused on investing in startups that are based in the United States. ARENA’s engineering and product development are in San Francisco, while marketing and operations are based out of New York.
With the funding, Bhargava plans to expand into more consumer and commercial markets, ranging from home gyms to physical therapy offices and military facilities.
The Hawks Ventures investment is not just in the form of dollars, but also connections in the worlds of sports, hospitality and fitness.
“It’s not just getting funding from another brand-name team, it’s about being able to access that network,” Bhargava said.
That doesn’t necessarily mean that Hawks players will automatically start training with the ARENA Platform. Garcia said the venture fund makes its decisions independent of the commercial side of the organization or the Hawks team.
Hawks Ventures is making investments in a time when investors are holding tight to their checkbooks. So far in 2023, investment funding in U.S. companies has dropped nearly 50% compared to this time last year, an analysis of figures from business data site Crunchbase shows.
With this initial $50 million fund, Hawks Ventures plans to make around 25 investments of about $1 million each, Garcia said.
The other half of the fund will be reserved for follow-on investments in their portfolio companies as they raise increasingly larger amounts of money — from seed to a Series A fundraise, or from Series A to Series B. It will take about five years to deploy all the funding, he added.
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