📈 Upside Analysis: What The Biggest Verticals for Sports Tech Startups Beyond Sports Are

In the past 10 years, we have seen a number of sports tech startups start in the elite sports market transition into other verticals such as military/government, healthcare, construction, the mining, oil & gas industry. Why? Because elite sports allows those teams to leverage the teams’ brand recognition by associating their products with those teams. But those other verticals, are where they can get the economy of scale and build a larger business over time.

In fact, expanding into sectors beyond sports presents a significant opportunity for sports technology companies. Key verticals such as military/government, healthcare, and industrial sectors (including oil & gas, mining, construction, and energy) can benefit from technological innovations. This analysis delves into each sector, highlighting key statistics, drivers, challenges, and provides recommendations for sports tech startups aiming to diversify. Here is a recap on the key verticals beyond the elite sports market:

Source: Upside Global, 2025

1. Military/Government

• Employment Figures (2023):
  The U.S. government employs approximately 2.3 million civilian workers, making it one of the largest employers in the country. This workforce includes personnel engaged in defense, public safety, policy development, and administrative roles, creating a significant opportunity for technology solutions to streamline operations and improve efficiency.

• Technology Adoption:
  Technology adoption in the military/government sector is robust, with a strong focus on modernization initiatives. Programs such as the Defense Innovation Unit (DIU) aim to integrate cutting-edge commercial technologies, including AI, wearables, and IoT, into defense and operational strategies. The sector also leverages data analytics for decision-making and cybersecurity to protect sensitive information.

• Employment Figures: As of March 2024, the Wall Street Journal reported in November 2024 that the federal civilian workforce comprised 2.3 million employees, representing less than 2% of the overall U.S. workforce.

• Technology Adoption: The Department of Defense (DoD) has initiatives like the Defense Innovation Unit (DIU) to accelerate the integration of commercial technologies into military applications, according to JPMorgan Chase.

• Key Drivers:

  1. Operational Efficiency: Technologies that enhance mission readiness and improve resource allocation are critical.

  2. Modernization: Defense agencies are under pressure to maintain technological superiority, driving investment in advanced tools.

  3. Safety and Performance Monitoring: Wearable tech and real-time monitoring systems improve troop readiness and safety in training or deployment.

• Challenges:

  1. Procurement Complexity: Navigating lengthy procurement processes and meeting rigorous compliance standards can deter startups.

  2. Cultural Resistance: Adopting commercial technologies may face resistance due to established military practices and concerns over security.

     RAND Corporation

  3. Security Concerns: Ensuring technology meets stringent security requirements is essential to protect sensitive operations.

2. Construction, Mining, Quarrying, Oil & Gas (Industrial Sector)

• Employment Figures (2023):
  The industrial sector employs millions of workers across construction (8 million), mining (595,000), and oil & gas industries. These industries form the backbone of infrastructure development, energy production, and resource extraction, making them critical to the economy. Workers are often located in remote or hazardous environments, increasing the need for advanced technologies that enhance safety and efficiency.

• Technology Adoption:
  The industrial sector is increasingly adopting advanced technologies to address challenges such as workforce shortages, operational inefficiencies, and safety concerns. Innovations include wearable tech for safety monitoring, IoT devices for equipment tracking, drones for site inspections, and predictive analytics for machinery maintenance. While adoption is growing, it remains uneven across industries and regions, with larger firms leading the way.

• Key Drivers:

  1. Safety Enhancements: Technologies like wearables and IoT sensors monitor worker health and environmental conditions in real time, reducing accidents.

  2. Efficiency Gains: Automation and AI-driven systems streamline operations, reduce downtime, and optimize resource allocation.

  3. Cost Reduction: Predictive maintenance and resource monitoring technologies lower operational costs by preventing equipment failures and improving energy efficiency.

• Challenges:

  1. High Implementation Costs: Advanced technologies often require significant upfront investment in hardware, software, and training.

  2. Training and Adoption: Workers need to be trained to use new systems effectively, and there may be resistance to change.

  3. Integration Complexity: Ensuring new technologies are compatible with existing systems and processes can be a significant barrier.

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3. Healthcare

• Employment Figures (2023):
  According to the U.S. Bureau of Labor Statistics (BLS) and the U.S. Census Bureau, in 2022, about 14.7 million people aged 16 and older were employed in healthcare occupations, accounting for 9.3% of total employment (source: bls.gov). Additionally, the U.S. Census Bureau reported that the healthcare and social assistance sector employed approximately 22 million people, making it the largest employer among all U.S. sectors (Source: census.gov).

• Technology Adoption:
  The healthcare industry is a rapidly growing market for digital technologies. Adoption includes telemedicine platforms, electronic health records (EHR), patient monitoring devices, and AI-driven diagnostics. Technologies that improve patient engagement, streamline administrative processes, and enhance clinical outcomes are gaining traction.

• Key Drivers:

  1. Improved Patient Outcomes: Advanced diagnostics, wearable health monitoring devices, and AI-powered solutions support better health management and treatment.

  2. Operational Efficiency: Automating administrative tasks like billing and appointment scheduling reduces costs and errors.

  3. Regulatory Push: Government incentives for adopting EHR systems and value-based care models encourage innovation.

• Challenges:

  1. Regulatory Compliance: Ensuring adherence to HIPAA and other laws governing patient data privacy can be challenging for tech companies.

  2. System Integration: New solutions must integrate seamlessly with legacy IT systems in hospitals and clinics.

  3. High Costs: The initial investment for technology, including training healthcare staff, can be prohibitive.

Recommendations for Sports Tech Startups

1. Leverage Existing Expertise: Sports tech companies specializing in wearables, performance monitoring, and data analytics can adapt these solutions to suit the needs of industrial workers, military personnel, and healthcare professionals. For example, wearable devices can be tailored to monitor worker safety in hazardous environments or to track military fitness.

2. Focus on Safety and Compliance: When entering sectors like healthcare or industrial work, startups must prioritize compliance with industry-specific regulations, such as OSHA standards for worker safety or HIPAA for patient privacy.

3. Build Partnerships: Collaborate with established companies and industry leaders to gain insights and credibility. Partnerships can also ease entry into regulated or complex markets, such as defense and healthcare.

4. Adapt to Sector-Specific Needs: Customize solutions to address unique challenges. For example, in the oil & gas sector, ruggedized devices may be required to withstand harsh environmental conditions, while in healthcare, technologies must prioritize accuracy and reliability.

5. Invest in Scalability: Create modular solutions that can be easily scaled across different applications and sectors, maximizing the potential customer base.

6. Focus on Training and Support: Provide robust training and support to ensure smooth adoption of new technologies. Offering ongoing support can also help build trust and foster long-term relationships with clients.

By strategically approaching these sectors, sports tech startups can effectively diversify their offerings and tap into new, lucrative markets.

Bottom line: Moving forward we expect to see more and more sports tech startups move beyond the sports tech industry and make inroads into larger verticals such as the military/government, healthcare, construction, the mining, oil & gas industry as a way to scale their business at a much faster pace, and grow their top line.

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