F1 Supercomputing – Investing as storytelling – Virtual Horse Racing – LA Dodgers' investment arm – Biopharma & Digital Therapeutics – Where Have All the Sports Movies Gone?
Day 42
Skin In The Game is dedicated to the art of sports investing. We cast a light on the startups and investors shaping the future of sports.
We also run a regulated angel syndicate connecting investors with visionary SportsTech startups. By providing a platform for investors, founders and execs to collaborate and co-invest, we’re creating a new kind of investment experience – one characterised by community, ideas, and optimism.
Confessions
The private markets are full of storytellers – it comes with the territory for founders, angels, and VCs. Some are better at it than others. And then there’s Packy McCormick.
His ingeniously titled “Not Boring” newsletter exploded onto the scene last year and since then, it’s become a part of the furniture in my inbox and indeed many others (over 60,000 of them). I’ve watched with interest, excitement and a dollop of irrational envy as he has built a humungous audience around a refusal to compromise on quality or quantity – two newsletters per week, always smart, funny, and surprising. His writing is full of pop culture references and laughs, much of it over my head.
Since starting the newsletter, Packy has been building an angel syndicate investing in tech companies with stories to tell – and helping to tell them via his deep dive investment memos. Over the past year the syndicate has invested over $4 million in over 20 companies. Now he’s launching a micro VC fund.
“Good artists borrow, great artists steal” is a saying that’s been attributed to Pablo Picasso, Steve Jobs, T. S. Eliot and several other geniuses. So, I’m in good company when I say that Not Boring’s model – startup investing driven by content and community – is the long-term strategy for Skin In The Game. The flywheel is obvious; storytelling promotes engagement and trust, which promotes deal flow, which promotes engagement and trust… The eternal cycle continues.
Finance has always been content-driven. When I worked in banking I poured over inches of reports and industry mags every week. Investment management firms were leveraging the power of audio years before podcasting became a thing. And the “newsletter” has been around for decades as a retail channel for fund platforms and advisors.
But something has changed. Big Finance – the ultimate vehicle for intermediation – is being cut out of the loop by domain experts and social influencers who “own” relationships with end investors. B2C is the new B2B2C, and content is the only game in town. Money doesn’t pour out of telephones anymore; it pours out of emails.
Last week I had lunch with a friend who works for a very large Private Equity house that does very large deals (Rory, thank you). Like me, he thinks sport is an overlooked sector when it comes to growth investing. Whilst I’m focused on developing expertise in the more accessible early-stage market, I agree that the sports companies lend themselves particularly well to Series A + investments where product-market fit has been established, since they tend to have distribution baked in. Reaching people and converting them into users is hard (and expensive) – so startups with network effects derived from human moats (celebrity founders investors and users) and favourable social dynamics (cool content) are attractive, even if the product is a work-in-progress. This is a major driver of my focus on sports.
On the morning that Bumble went public in February 2021, Whitney Wolfe Herd told Time that, “The brand is better than the product right now.” That’s crazy for a 6-year old company with millions of users and billions of dollars in enterprise value. Crazy, and revealing.
Over lunch we spoke a lot about athletes owning demand and monetising independently of brands, leagues and other middle men. It reminded me of Andy Marston’s thoughts regarding tokenisation and its implications for sports club ownership. I will probably (definitely) write about this at some point, but Andy has done a brilliant job of getting the cogs turning.
Deal flow
🧠 Zone7 Raises $8m In Series A Round To Expand Artificial Intelligence Platform For Predicting Sports Injury Risks – The company recently secured $8m in Series A funding to help expand its reach in sports – as well as other industries. Excited to see Tal and Eyal build out the team and scale the business in the months ahead.
🐎 TCG and Andreessen Horowitz Invest in Startup Behind Virtual Horse Racing Platform – Zed Run is a virtual platform that allows users to buy, sell, breed and race digital horses in a video game style setting. It’s raised $20m from The Chernin Group, with participation from Andreessen Horowitz and Red Beard Ventures.
🕶 Gary Neville, Tyrone Mings and Thierry Henry back VR training startup Rezzil – Following a raise of around £2m (from the likes of Thierry Henry, Gary Neville, Vincent Kompany, Michail Antonio, Tyrone Mings and Anthony Watson), Rezzil will be launch to the public in August. It’s already the virtual training and rehab aid of choice for the world’s top football clubs, apparently.
💰 LeBron James In Early Talks For Sale Of His SpringHill Company – Conversations are said to be in the early stages, with a valuation as high as $750m. Nike is reportedly among the suitors.
👩⚕️ The Nue Co Raises $25m in Series B Funding – The growing wellness brand has raised $25m in a Series B funding round, led by Pamoja Capital.
💼 JOON Raises $2.3m to Power HR Wellness Benefits That Employees Actually Use and Appreciate – The corporate wellness solution “replacing one-size-fits-all perks and manual expense reporting with flexible and individualised benefits” raised a $2.3m seed round.
🚣♀️ CityRow raises $12m for connected rowing machines and studios – Founded in 2014 as an in-person rowing studio, CityRow was relatively early to adopt the at-home connected model. It experienced a 375% revenue growth last year, largely on the back of rowing machine sales and platform subscriptions.
📱 Fitness start-up HealthifyMe raises $75m in fresh funding – AI-led health and fitness app HealthifyMe has raised a Series C led by LeapFrog and Khosla Ventures. The business has been scaling rapidly through the pandemic and is now one of the largest health and fitness apps in the world outside the US and China.
📱 LeagueApps raises $15m to be the ‘operating system’ for youth sports – LeagueApps, which aims to be the operating system for youth sports organisations, raised $15m in Series B funding.
🏠 Wecasa raises $17.7m for its home care and wellness marketplace – The French company is building a marketplace for home care and wellness.
🧃 Plant-Based Recovery Beverage Startup The Plug Drink Secures $1.5m Seed To Prepare For National Rollout – $1.5m in seed funding led by wish.com’s cofounder and CEO Peter Szulczewski, NBA basketball player Myles Turner, and Miley Cyrus’ manager Adriana Arce.
🍄 Psychedelics-focused investment firm Palo Santo launches with $35m to tackle mental health crisis – The Chicago-based VC has raised an initial $35m to support psychedelic-based startups across biopharma, digital therapeutics, healthcare services and tech-enabled companies. Great to see these guys attack the psychedelics niche with such focus.
🤩 Obé Fitness raises $15m for its personality-driven exercise platform – The round was led by CAVU Venture Partners and features Athleta, Samsung Next, Wheelhouse Entertainment and WW International. See intro above for thoughts on distribution-friendly startups.
🚴♂️ Telefonica invests in Spanish startup Volava – Telefonica's accelerator Wayra took part together with Inveready and JME Ventures in a financing round for home fitness startup Volava in which the Barcelona-based firm raised EUR 2m.
🧠 Leiio Wellness Announces Oversubscribed $3.5m Private Placement – Leiio is a US focused premium brain performance brand centred around psychedelic mushrooms.
⚾️ Elysian Park Ventures CEO Cole Van Nice Invests In the Future of Sports – Cool profile of Cole Van Nice, co-founder of the LA Dodgers’ private investment arm, Elysian Park Ventures.
🌳 Serena Williams Opens Up on Her New Investment Through Serena Ventures Capital– In 2016, Serena built her venture capital firm, Serena Ventures. As of now, she has provided for more than 30+ start-ups through her firm (that GIF is out of date, she now has 23 Grand Slam titles).
🏌️♂️ Bruin Capital Buys Golf Simulator Full Swing in $160m Deal – Bruin, led by George Pyne, is acquiring the controlling stake from North Castle Partners, which will remain a shareholder. The deal is valued at roughly $160m.
🎾 New VC Fund Wildcard Ventures Launches – Tennis Australia has launched its own venture fund to help advance SportsTech startups from the very beginning of their journey.
🏙 LUMO Labs announces investment in urban sports & culture community platform CityLegends – LUMO Labs is making a substantial early-stage investment in CityLegends, an emerging urban lifestyle startup. The CityLegends platform connects urban sports – also known as action sports – and urban culture communities of athletes and artists to meet and compete.
Big picture stuff
🏊♂️ Show me the money: Ironman goes from free to $730 million – Since it began in 1978, Ironman has had five owners heading into this month’s sale. A look at the history of Ironman ownership over the years.
🚵♀️ Inside The Race: Cycling's Most Iconic Sprint On The Champs-Elysées – This video takes us inside the peloton to catch all the action on these extended highlights from the grand finale of the 2021 Tour de France.
🏎. How Cloud Supercomputing Helped Design 2022 F1 Car That Promises More Exciting Races – The new design would not have been possible without the use of cloud-based supercomputing that performed thousands of simulations to find a solution.
🐅 Tiger Global vs. SoftBank: Inside the investing playbooks that upended Silicon Valley – The two firms invested the most money into startups so far in 2021. But how they do it is completely different. This piece on “playing different games” is also worth a read.
🗣 In conversation with Hussein Kanji, the founding partner at Hoxton Ventures – Hussein is one of the founding partners at Hoxton Ventures, who have backed four unicorns and created $54bn of value.
⚾️ How MLB Superstar Shohei Ohtani Made $6m In Endorsements Without Even Trying – The first two-way All-Star in baseball history, Ohtani is a hit with marketers on two continents, with a league-best endorsement portfolio. Is he willing to capitalise?
⛓ NFT sales volume surges to $2.5bn in 2021 first half – The market for NFTs surged to new highs in the second quarter, with $2.5bn in sales so far this year, up from just $13.7m in the first half of 2020.
🌱 8 Myths of the Pre-seed Venture Investing – In the same way that you would not apply the enterprise sales playbook when running an SMB SaaS company, the strategies and methods used by Series A firms do not apply to pre-seed. In fact, they often can be the opposite of what makes sense.
👩💼 History-Making NFL Coach Lori Locust Talks Diversity in Sports – Tampa Bay Buccaneers’ assistant defensive line coach Lori Locust says she looks forward to the day when she’s referred to simply as a “coach” rather than “female coach”.
🎶 How the Heck Is Peloton the Best-Paying Music Streaming Service? – The exercise bike company improbably has Spotify and Apple Music beat when it comes to cashing out artists.
🎧 Olympic dreams are no slam dunk – Why Kareem Maddox left his dream job at 30 to pursue another dream – representing Team USA in 3x3 basketball at the Tokyo Olympics – and what he’s going to do now that his Olympic dream didn’t work out. Plus, find out how athletes fund their Olympic dreams.
👟 Advances in spike technology are laughable and unfair, says Bolt – “It’s weird and unfair for a lot of athletes because I know that in the past they (shoe companies) actually tried and the governing body said no, you can't change the spikes.”
🎞 Where Have All the Sports Movies Gone? – The reasons ‘Space Jam: A New Legacy’ was made are also the reasons there are hardly any films about sports anymore.
🦴 Five Ways Humans Evolved to be Athletes – An archaeologist explores human athletic paleobiology to explain how our prowess in sport has deep roots in evolution.
Some tweets
Hope everyone is enjoying the greatest show on earth. After all the speculation, negativity and government health warnings, it’s great to see world-class athlete’s doing their thing in Tokyo. Especially when it involves a rugby ball…
Cheers,
Ed
—
Edward Rhys
Founder / Skin In The Game
www.skininthegamegroup.com
🙏 A favour
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Skin In The Game is an angel investing group connecting investors with visionary SportsTech startups. We provide a regulated platform for fans, athletes, entrepreneurs and brands to collaborate and co-invest. By investing in SportsTech we can unleash the full potential of sports, enriching the lives of people everywhere.
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