Why sports – The Roblox Economy – Possibly the biggest franchise sale in US sports history – Connected rowing (again) – Experiential learning – Amateur baseball data – Reversing Diabetes
Week 14
Skin In The Game is a weekly newsletter dedicated to sports investing. We highlight the startups and investors shaping the future of sports and its adjacent markets.
We also run a regulated angel syndicate connecting investors with visionary SportsTech startups – a platform for investors, founders and execs to collaborate and co-invest.
Confessions
“Why sports?”
It’s a question I’m asked every day by investors. And thankfully, I have a half-decent answer.
I tell them that sports is engaging and global; that it’s much easier onboarding clients through the universal language of sport than the obscure vocabulary of other, less emotive sectors.
But the real reason goes deeper. I’ve chosen to focus on sports because I believe it’s a gateway to other markets with huge commercial potential. Yes, sports is big business in its own right. But it’s also an incubator for emerging technologies with the potential to transform how we work, play, and live.
If you’re an investor in sports, you’re an investor in a host of innovations poised for mass adoption. The obvious pathway is from sports into health, but actually, technologies and therapeutics developed in the sporting arena have promising applications in sectors as diverse as entertainment, lifestyle, corporate wellness, defence, and a host of other markets.
“Technology transfer” fascinates me. The idea of testing and validating a groundbreaking innovation in one context and then scaling it to other, entirely different markets makes a lot of sense. Sports is the perfect testbed – it’s data-driven, attention-heavy and investment-led, providing an opportunity for innovators to test and iterate deep-tech and biotech innovations that might otherwise never see the light of day.
Of course, the concept of tech transfer isn’t new. It’s been around for donkeys’ years. One prime example is the proliferation of GPS. The Global Positioning System started life as a government technology developed to guide nuclear missiles, but was later adopted by private industry and integrated by a vast array of applications. Now it’s embedded in mobile phones, mapping applications, social networks, local information searches, and enterprise applications. It’s morphed from a highly specialised and secretive nuclear technology to an everyday miracle that sends you on ridiculously convoluted routes, making you late for Sunday lunch with your punctuality-obsessed parents and launching many a heated debate betwixt husband and wife. Long live the road atlas!
Trainers / sneakers are perhaps the most obvious vehicle for illustrating the power and importance of tech transfer from sports to other sectors. The earliest version was created by The Liverpool Rubber Company, founded by John Boyd Dunlop, in the 1830s. Dunlop was an innovator who discovered how to bond canvas uppers to rubber soles. These were known as “sandshoes”, and worn by Victorian pleasure-seekers on their beach excursions. Fast-forward the best part of 200 years, and trainers have now become a staple of our wardrobes; a lifestyle icon that we rely upon to get us from A to B, and now the star of the gargantuan athleisure industry. And yet trainers remain a highly engineered sports product in their own right, one that continues to evolve and improve (albeit creating much controversy). The trainer is a symbol of sports’ power to incubate advancements that seem trivial in the near term, but prove to be life-changing and even era-defining over the long run.
For such an interesting, important topic, surprisingly little has been written about tech transfer (unless I have just done a bad job of digging out research on the topic). So I have added it to my list of things to do, which currently includes: closing a seed round for my business; building a content-driven angel investing platform; sourcing compelling investment opportunities; getting my head around NFTs; and putting the BBQ away for winter (there are many other items on my to do list, in case you’re wondering).
One area that I’m really excited about is therapeutics. Despite changes to the marijuana discourse in recent years – with many US states decriminalising/legalising its consumption – “weed” continues to have a stigma attached to it. So too psychedelics. Regardless of countless startups doing cool things in this space, I believe that attitudes will only change through the top-down dispersal of positive messaging around the efficacy of controversial treatments in pain management, mental health, and other health settings from big brands and influencers. This “normalisation” is now happening. In June 2021, a commission formed between the NFL and the league’s players’ union announced that it would award up to $1 million in grants for researchers to investigate the therapeutic potential of marijuana, CBD, and other alternatives to opioids for treating pain. Small change for an organisation like the NFL, but huge for the narrative.
Whilst still early days, it feels like the discourse around marijuana et al is changing. Professional athletes and rights holders are thought leaders and trendsetters – they command lashings of trust, reach, and social impact. Our behaviour as sports fans is driven by mimetic desire – the psychology of human imitation. This is an immutable, evolutionary mechanism, well-documented by Luke Burgis in his impressive book Wanting. When celebrity athletes and big rights holders get behind marijuana and psychedelics they change the narrative, endorsing and de-risking previously taboo propositions for the fan on the street. In the same way that weekend warriors have adopted groundbreaking sports science research to train, perform and recover better, so too the general population will gradually absorb and integrate cutting-edge therapeutics (with a little help from regulators and that most elusive and precious of all market forces, time).
Witness the power of sports to drive grassroots behavioural change and improve health outcomes across the population. We are lucky to work in an industry that enriches lives. Sports is a source of joy to billions of people all over the world, able to inspire and improve people everywhere. It doesn’t (or at least, shouldn’t) patronise and preach. Rather, it should lead by example. Our world is at its most powerful and impactful when it’s showing, not telling; leveraging the uncanny power of human desire to appeal to our highest ideals and deepest physical reserves.
We’ve only scratched the surface of what’s possible. New technologies are transforming how sports are played, consumed and managed, driving athletic performance, fan experiences, and new business models. And they are going to transform other industries, too. By investing in SportsTech we can unleash the full potential of sports, enriching the lives of people everywhere.
That’s the plan, anyway.
Deal flow
🎽 Going after social commerce for sportspeople, Millions gets $10m – Millions, a social commerce platform geared toward professional and semi-professional athletes wanting help to monetise their fanbase by selling merch and/or on-demand video, has grabbed $10m in funding led by Boston-based Volition Capital.
🏀 Sacramento Kings valued at US1.8bn as Arctos takes 17% stake – Private equity firm Arctos Sports Partners has added to its NBA investment portfolio having agreed a deal to take a 17% stake in the Sacramento Kings.
🎲 888 snaps up William Hill’s European business for UK£2.2bn – Gambling giant 888 Holdings has agreed a deal worth £2.2bn to buy UK-based bookmaker William Hill’s European business.
⛓ Steve Cohen leads investment into Recur– Sports NFT startup Recur has raised $50m in Series A venture capital funding, led by Digital, an investment fund backed by Mets owner Steve Cohen.
⚽️ Manchester United sees Ariel Investments increase stake to 13.8% – Mutual fund company Ariel Investments has increased its stake in English soccer giants Manchester United to 13.8%. The $100m deal to acquire the shares was done through United’s listing on the New York Stock Exchange and the club’s owners, the Glazer family, have not traded any of their shares.
⌗ Smart Data, Insights Arms Race Has Agencies Vying for Analytics Firms – Excel Sports Management recently acquired Block Six Analytics (B6A), a data insights and partnership valuation company. With the B6A deal, Excel becomes the latest sports and entertainment-focused agency to beef up its internal analytics, measurement and insight capabilities (investor/operator Bruin Capital did the same when it tucked IEG into Engine Shop and acquired Two Circles).
🎤 Rapper Yo Gotti buying into DC United at $730m valuation – Rapper Yo Gotti has reached an agreement to purchase a minority stake in DC United, valuing the Major League Soccer club at roughly $730m.
💰 Payments Software SpotOn Raises $300m, Buys Appetize – Digital payments software provider SpotOn has raised a $300m Series E fundraising round, led by venture capital firm Andreessen Horowitz. SpotOn, which now values itself at $3.15bn, acquired Appetize, a mobile ordering system that powers in-venue food and retail transactions for more than 60% of major league sports teams in the US.
🎮 Toya Raises $4m, Continuing its Focus On The Roblox Economy – Tel Aviv-based gaming studio Toya has raised a $4m seed round led by Drive by DraftKings, the venture capital firm co-founded by the sports betting operator. Toya’s round also included investments from NFL legend Eli Manning, former Xbox executive Ed Fries, Remagine Ventures and Powerhouse Capital.
⚾️ BaseballCloud Acquires Ball Flight Data Company Yakkertech – Leading amateur baseball data platform BaseballCloud has reached an agreement to acquire Yakkertech, an optical tracking solution that provides ball flight data to dozens of teams in college baseball, all the members of the independent Frontier League, and seven MLB organisations.
🏌️♀️ Vista Outdoor to Acquire Foresight Sports for $474m – Vista Outdoor has entered an agreement to buy golf simulator maker Foresight Sports for $474m.
🏈 Jeff Bezos, Jay-Z Among Potential NFL Suitors – NFL sources expect the Denver Broncos to hit the market in 2022 after what the team says will be an “orderly determination of ownership” – setting the stage for possibly the biggest franchise sale in US sports history.
✨ CAA Experiential Entertainment Affiliate Constellation Immersive Gets “Significant” Investment From 30West – A year after its founding, CAA experiential entertainment affiliate Constellation Immersive has gotten a “significant” equity investment from 30West, a prominent finance and advisory firm.
🚣♀️ Aviron Raises $4.5m To Deliver The Best In-Home Rowing Experience – Aviron is a connected fitness rowing machine that provides short, high-intensity workouts. The Toronto-based startup has raised $4.5m in a seed round led by Samsung, with participation from Global Founders Capital, Formic (founder of Oculus's Fund), and Arjun with Tribe Capital.
👩💻 Experiential learning startup Habbit raises $320K in pre-seed round – Habbit, an interactive online learning platform for new-age digital skills and hobbies, has raised $320k in pre-seed round led by Ashok Goyal, ex-Supervisory Board Member, Sanjeev Goenka Group; ex-Managing Director, Philips Carbon Black; and ex-President of KEC International, with participation from a clutch of well-known angel investors.
🩸 Sugar.fit To Raise $10m In Seed Round – Bengaluru-based healthtech startup Sugar.fit that helps users manage and reverse diabetes, is slated to raise $10m in a seed round led by Cult.fit. Endiya Partners and Tanglin Venture Partners will also participate in the round.
☘️ Plant protein that behaves like animal protein? Lemna-fueled Plantible Foods raises $21.5m, gears up for 2022 launch – The cash injection, bringing its cumulative funding to $27m, will enable Plantible Foods (currently operating at pilot scale in San Diego) to build its first commercial facility in the Midwest and introduce food formulators to a plant-based protein that has many of the nutritional and functional attributes of egg white and a neutral taste, odour and colour.
🚲 Dutch e-bike maker Van Moof raises $128m to expand – Dutch electric bicycle maker Van Moof on Wednesday said it has raised $128m to expand production and speed its growth in an investment round led by private equity firm Hillhouse Capital.
🦷 Quip’s new $100m round will usher in more than just clean teeth – Quip is on a mission to be the go-to platform for both personal and professional oral care, and a new $100m cash infusion is giving the New York-based company fuel to do it. The new Series B round from Cowen Sustainable Investments (CSI) follows the company reaching profitability in April 2020 and gives Quip more than $160m in total funding since the company was founded in 2015.
🐂 AgFunder raises $21m for New Carnivore alt-protein fund – Agrifoodtech VC AgFunder has announced the final close of New Carnivore, its alternative protein fund, on $21m. ADM Ventures, the VC arm of the global food and commodities company Archer-Daniels-Midland, invested in the fund. The fund is targeting 20 investments overall.
🤩 Bella Hadid Has a New Job: Cofounder of Kin Euphorics – Bella Hadid doesn’t know how cans of Kin Euphorics, the nonalcoholic adaptogenic drink, ended up in her fridge. All she knows is that one day, in 2019, they appeared. “The universe placed it there,” she says.
⌚️ iFIT Health & Fitness Files For IPO – iFIT Health & Fitness, which sells connected fitness equipment and subscriptions, filed for an IPO with the SEC to raise up to $100m.
🖥 Clubessential Holdings Announces Strategic Growth Investment From Silver Lake – Silver Lake, the global leader in technology investing, has agreed to make a significant growth investment in membership-management software company Clubessential Holdings.
💪 World’s first digital therapy for treating erectile dysfunction has publicly launched and raised $2.25m – Regimen, the world’s first digital therapy for treating erectile dysfunction, has raised $2.25m in seed funding. Regimen goes beyond medication to address the root causes of ED, with treatments ranging from pelvic floor training, cardiovascular training, diet, mindfulness, education, and more.
🍄 Psychedelics Co. Synthesis Institute Closes $7.25m Series A Through Non-Traditional VC Path – Synthesis Institute, known for its wellness retreats and psychedelic practitioner training, has closed a $7.25m Series A, becoming the first psychedelic startup to adopt and raise funds as a Steward-Ownership organisation.
👩⚖️ Women’s health tech brand Elvie tops up Series C – Elvie, the women’s health tech pioneer behind a connected breast pump and smart pelvic floor exerciser, has topped up a Series C which it announced earlier this summer – adding a further £12.7m to bring the total raised to £70m.
📱 Oviva raises $80m in Series C funding to give millions of people across Europe access to personalised, app-based diet and lifestyle coaching – Oviva, the digital health scaleup which provides diet and lifestyle coaching to people who deal with diet-related health challenges – has raised $80m in Series C funding. The round was co-led by Sofina and Temasek, alongside existing investors AlbionVC, Earlybird, Eight Roads Ventures, F-Prime Capital, MTIP, and several angel investors.
🧃 The Naked Collective secures more than £5.3m in investment – Functional drinks start-up, The Naked Collective, has secured more than £5.3m in a fundraising round to support its global expansion.
Some tweets
It’s been a productive period for Emma Raducanu, George Russell, Cristiano Ronaldo, and Shane Lowry… not so much for Gavin Williamson. A week is a long time in politics… even longer in sports. Thankfully, it never feels like it.
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.
SKIN IN THE GAME LIMITED is registered in England and Wales under Company Number 13200102 and with the FCA as an Appointed Representative with FRN 946089. SKIN IN THE GAME LIMITED is an Appointed Representative of Finex LLP which is authorised and regulated in the UK by the Financial Conduct Authority (“FCA”) with firm reference number 507537.