The 3 P's of startup investing – Multi-sport metaverse – Ahmedabad IPL franchise – Indoor virtual cycling – Vegan meal delivery – Ayurvedic nutrition – The Psychedelic Revolution
Week 20
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 startup investment club connecting investors with visionary sports, health, and entertainment startups – a platform for investors and founders to collaborate and co-invest.
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Confessions
This week I visited an entrepreneur who is preparing to launch a killer FinTech business. We’re both “solopreneurs” (as much as I hate that yucky term) so it’s good to get together and kick the tyres from time to time. I’m an advisor to the company, but more importantly, a friend who is keen to help and see the thing thrive. We spent some time working through the practical implications of launching a newsletter and podcast and the somewhat nebulous (but I think crucial) concept of authenticity and how that relates to brand tone of voice. I was reminded of Mark Twain’s legendary advice that “If you tell the truth, you don't have to remember anything” – a useful heuristic that I’ve followed with my own newsletter, and which has made the process simple, enjoyable, and rewarding (albeit at times taking me out of my comfort zone).
After the session we cracked open a bottle of wine and the conversation moved on to investment. As I’ve emphasised previously, I’m not an expert startup investor – the idea of Skin In The Game is to collectivise with others and pool our ideas, experiences and capital to generate better investment outcomes and become experts over time. Having said this, I do have strong opinions based on many years at the coal face founding, running and advising startups. I may not know what precisely what to look for, but I know what not to look for.
For some time now I have wanted to distil my beliefs down into a clear, concise and above all useful framework for investing in startups. A few months ago I did this, and have found it helpful when filtering opportunities and engaging with startups looking for funding:
This works well as a checklist, ensuring I don’t miss anything major. But it’s still too complicated and mechanistic for my liking. So, during my wine-fuelled conversation with the aforementioned fintech founder, I whittled it down to three things. I am wary of arbitrary lists, but I think “The 3 P’s” is a nice way of boiling down what matters to me when screening investment opportunities for Skin In The Game:
People – for me, this is a deal-breaker. If the people founding and running a startup aren’t investible, the company itself is a no-go. I’m looking for people who are smart, driven (I would always prioritise the latter over the former), have integrity (hard to prove without a decent time horizon)… visionaries with a clear sense of purpose and mission. Preferably those who have already taken financial risk by starting a business. And there needs to be chemistry. They might be the greatest entrepreneur in the world, but if we don’t get on, how are we going to go on a decade-long journey together?
Product – if the people inspire, then so must the product. I need to get it (it’s amazing how many pitches I simply don’t get). Critically, the product must be differentiated and in some way unique. Small tweaks to existing products, or the dreaded “we execute better ” make me uncomfortable. To add more P-words to the mix, this is as much about positioning as it is about product. I’m looking for startups that are creating a new category and leading it, rather than launching a me-too product that seeks to capitalise on existing engagement. This makes it easier to get people’s attention, blow away the competition, and buys time to build a meaningful economic moat. Of course, competing on price or service can work. I’m just not that interested in it.
Pipes – if the people inspire and the product grabs me, then there must also be a way of reaching consumers / clients, engaging them, and converting them into paying customers (or monetising them some other way) in a way that’s economically sustainable. Many years ago I made this mistake myself by assembling a brilliant team to build a beautiful social media product… and failing miserably to distribute it. It was massive failure on my part, one born of youthful idealism and the misguided belief “that if you build it, they will come”. Out in the real world, beyond the field of dreams, nothing is less true. Even the best products need strong pipes to reach customers, which is why I am suspicious of “network effects” and other buzzwords as a marketing strategy. Strong pipes means solid unit economics that enable startups to acquire customers at a cost that is compatible with their lifetime value. For the product to scale, so must the underlying maths.
This is just the first step in the filtering process, a sense check designed to save time and surface startups that have a chance of delivering outlier returns. I guess to experienced VCs and founders this might seem rudimentary and reductive, but I’m searching for a simple way to articulate what gets me excited as an investor and syndicate lead. “The 3 P’s” does that for me, and I’m eager to hear how other investors approach the screening process.
Deal flow
💰 Sports Innovation Lab Raises Total Funding to US$5.8 Million with Latest Round – Sports Innovation Lab, a data-driven fan intelligence company, has raised another round. It was co-led by Elysian Park Ventures, the private investment arm of the Los Angeles Dodgers’ ownership group, and Eileen Murray, the former co-CEO of Bridgewater Associates, with participation from a number of private and public equity investors, including sports, media and technology investment platform Aser Ventures.
⛓ Fanatics’ Candy Digital NFT venture hits US$1.5bn valuation after new investment – Candy Digital, the sports NFT venture backed by Fanatics, has raised an additional US$100 million in funding, valuing the company at US$1.5 billion. The Series A funding round was led by Insight Partners and Softbank Vision Found 2 and included former NFL quarterback Peyton Manning.
🚴♀️ Ironman acquires FulGaz to bolster virtual events tech stack – The Ironman Group has confirmed the acquisition of indoor virtual cycling app, FulGaz, which the global triathlon promotion says marks a major step in delivering enhanced services to athletes competing in its events.
👩⚕️ Lark Health Raises $100 Million Series D Funding Round – Lark Health has closed a $100 million Series D funding round led by Deerfield Management Company. The funding round also includes crossover fund PFM Health Sciences, as well as returning investors Franklin Templeton, King River Capital, Castlepeak, IPD, Olive Tree Capital, and Marvell Technology cofounder Weili Dai. Funding Will Support Further Research and Development for Lark's AI Chronic Disease Management Platform and Help Expand Virtual Care Integrations.
🌱 Allplants scoops $52M to deliver more plant-based microwave meals – Vegan meal delivery startup Allplants has nabbed £38 million in Series B funding led by Draper Esprit to serve up more tasty plant-based, heat-at-home meals direct to UK consumers.
🙎♀️ Alloy Raises $3.3 Million In Seed Funding Round For Telehealth, Prescription, And Community Platform To Address Health Of Women Over 40 – Alloy, a new telehealth company addressing the healthcare needs of women over 40, closed a $3.3 million seed funding round from venture studio Kairos HQ and PACE Healthcare Capital, as it prepares to launch later this year.
💉 Sprinter Health Raises $33 Million in Series A Funding to Eliminate Barriers to Healthcare Through In-Home Lab Draws, Vitals Checks and COVID-19 Testing – Sprinter Health, an on-demand mobile health company that sends full-time nurses and phlebotomists into the home for convenient and affordable lab draws, vitals checks, and COVID-19 testing, closed $33 million in Series A funding led by Andreessen Horowitz, with participation from General Catalyst, Accel, Google Ventures (GV), and others.
🚬 Harvard Public Health Startup Blows Through Seed Funding Expectations With $3M Round – Harvard Public Health spin-off smoking cessation and mental health startup, Vincere Health, has blown through seed funding expectations with an oversubscribed $3M round. Vincere’s seed round was led by insurance giant American Family Insurance (AmFam Institute), top-tier healthcare investors Flare Capital, SixThirty Ventures, Headwater Capital, ex-CEO of Tenet Healthcare Trevor Fetter, and other leading investors including Victress Capital, Equity League (founded by Microsoft, The Packers, The Bucks, The Brewers and TitletownTech), Yard Ventures, Mentors Fund, BonBillo and others while being alumni of Techstars, Alchemist and Harvard accelerator programs.
⚽️ Unique Sports Group: Two of largest independent football agencies to merge – Two of largest independent agencies in football are set to merge; UK agency Unique Sports Management joining with Germany's International Sports Management to form Unique Sports Group; Reece James, Aaron Wan-Bissaka, and Callum Wilson among players on books.
🎮 Faze Clan to go public in US$1bn SPAC acquisition – Esports media specialist Faze Clan is to go public next year in a merger with SPAC B. Riley Principal 150 Merger Corp (BRPM) that values the combined entity at US$1 billion.
⛓ GreenPark Sports raises US$31m to accelerate metaverse vision ahead of NFT launch – Social sports gaming developer GreenPark Sports has raised US$31 million to accelerate its plans for NFTs and its vision of a multi-sport metaverse. The Los Angeles-based startup was founded in 2018 and offers an app with multiple fan ‘universes’ based on major sports and esports competitions in which users can play games, enter contests and collect items for their avatar. Its Series B funding round was led by existing investors Galaxy Interactive, Sapphire Sport, SignalFire and Advantage, with newcomers including Nassef Sawiris’ NNS Group, Gaingels, DH.VC, and FTX’s Alameda Research.
🏏 CVC Capital Partners now bats for Ahmedabad IPL franchise – Private equity firm CVC Capital Partners made its first sports debut in India by successfully bidding and winning the Ahmedabad IPL franchise.
💵 SportsMap Tech Acquisition SPAC sets IPO at US$100m – SPAC SportsMap Tech Acquisition has closed a US$100 million IPO. The blank-cheque firm focuses on sports technology deals.
🌱 Actor Malaika Arora invests in Ayurvedic brand Kapiva – Homegrown direct-to-consumer Ayurvedic nutrition brand Kapiva has found a brand ambassador and investor in model and television personality Malaika Arora. Kapiva has raised from investors such as Vertex ventures, Fireside, and 3one4 capital.
⛓ GigLabs raises $4.5M to bring NFTs into mainstream sports, entertainment – Atlanta blockchain startup GigLabs raised $4.5 million to help sports and entertainment brands launch NFTs. Panoramic Ventures led the round with Dapper Labs, a venture-backed NFT company behind NBA Top Shot, an NFT exchange for professional basketball games. Other investors include Collab+Currency, Red Beard Ventures, Eterna Capital, Alumni Venture Group, Gaingels and Amino Capital.
⚽️ ALK Capital complete Burnley takeover worth around £200m – ALK Capital have completed their takeover of Burnley. The group, headed by Alan Pace, have been in discussions for 14 months and now their sports investment arm, Velocity Sports Partners, have acquired an 84% shareholding in the club.
🥑 Food tech company Nick's raises $100 million in funding round – Swedish food tech firm Nick’s raised $100 million in a funding round led by investment companies Kinnevik, Temasek and Ambrosia Investments. Gullspang, venture capital firm Peak Bridge, fund Capagro and investment company Nicoya also played.
💲 Drive by DraftKings VC fund raises US$60m – Drive by DraftKings, the multi-stage venture capital firm investing in sports tech and entertainment companies, has raised US$60 million in its first funding round. Notable investors include The Kraft Group and the Jones family, owners of the National Football League’s (NFL) New England Patriots and Dallas Cowboys, respectively. Todd Boehly, who has stakes in the NBA’s Los Angeles Lakers, the WNBA’s Los Angeles Sparks and MLB’s LA Dodgers, is also a backer.
🎮 Admix raises $25M Series B to scale up in-game ads, and prep for metaverse gaming – This is a $25 million Series B round to scale up its “In-Play” solution and prep it for new platforms like metaverses — the likes of Facebook and others are clearly building. The round was co-led by Elefund and DIP Capital. Also participating is Force Over Mass, Notion Capital, Speedinvest, Rocket Capital, Colopl Next, Sure Valley Ventures and Sidedoor Ventures, as well as growth investor Kuvi Capital and angels from the gaming industry.
🇺🇸 Atlanta online fitness startup Vivo raises $1.1M to grow team, customer base – Online strength training fitness startup Vivo raised a $1.1 million seed round. Eight investors participated in the round, according to the SEC filing. The individual investors are from Atlanta and the healthcare and ageing industry.
🇦🇪 UAE's Fitlov looks to AI for on-demand fitness after latest fund – UAE-based fitness app Fitlov has raised $500,000 in a Pre-series A round from several regional investors. The startup plans to use its new funds to expand its on-demand personal training platform and develop its services to offer AI-fueled personalised assessment and recommendations.
🍄 Where the Psychedelic Revolution Is Headed, According to the Guy Who (Arguably) Started It – GQ talked to pioneering psychedelic activist Rick Doblin about the promise of MDMA therapy for PTSD, working with Republicans, and his hope for a drug-assisted global spiritual awakening.
Some tweets
Tomorrow’s Wales vs All Blacks fixture looks set to be a bit of a farce, with Wales missing a full 20 players due to the game being arranged outside World Rugby's international window, COVID, and the usual injuries. Still, as a closet Wales fan (clue’s in the “Rhys”), I’d love to be proved wrong.
Cheers,
Ed
—
Edward Rhys
Founder / Skin In The Game
www.skininthegamegroup.com
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Skin In The Game is a startup investment club connecting investors with visionary sports 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.