The athlete founder – Collectibles boom – Move-to-earn – Sensor-free sports coaching – Daily fantasy sports in Brazil – Modernising golf operations – Athlete mental health – Trendy wellness brands
Week 31
Skin In The Game is a weekly newsletter dedicated to investing in sports. 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.
Oh, and we’re raising capital to ramp up the business. Get in touch if you want to find out more.
Confessions
Athletes are getting into investing. This much we know. But they’re also starting companies.
Last week we noted that Tom Brady’s NFT collectibles startup Autograph raised a $170 million Series B co-led by a16z and Kleiner Perkins with involvement from Lightspeed Venture partner Nicole Quinn and Katie Haun’s yet to be named new firm.
Brady has become something of a crypto aficionado, having invested in FTX (a heavyweight crypto exchange whose founder Sam Bankman-Fried also sits on the board of Autograph). He’s even decorated his Twitter with “Laser Eyes”, a not-so-secret code beloved by crypto enthusiasts.
Autograph is hitting all the right notes. It's selling picks in the non-fungible gold rush, helping athletes and entertainers launch and promote their tokens. And its squad of celebs with NFT deals includes such titans as Tiger Woods, Naomi Osaka, and Tony Hawk.
The thing I like about their model is that it has distribution baked in – in addition to listing on established platforms such as DraftKings and OpenSea, Autograph is able to get millions of eyeballs on its “Drops” through the social reach of its “Icons”. That kind of distribution is worth its weight in NFTs.
Brady’s side-hustle got me thinking about the crossover between playing sports and building startups. As day-to-day experiences and high-level cultures, startups share many similarities with sports teams:
Fast-moving, hyper-competitive landscape
Emphasis on teamwork
Experimentation and adaptation is everything
Extreme risk-taking
Physical and mental hardship normalised
Coping with uncertainty
Operating under extreme pressure
Prospect of life-changing wealth creation
Vehicle for driving positive social change
Move fast and break things.. literally!
For me the one word that brings together all of these very difficult things is performance. People who thrive in elite sports teams have a good chance of thriving in startups because they understand how performance works – that it’s a process, not an outcome. Great sports performances and tech products are built upon exacting habits, incremental improvement, shipping before you’re ready.
Startups can learn from athletes and their obsession with performance, and vice-versa. So I’m not all surprised that a startup would want to work with Brady, and that a person with his talent, profile and wealth would choose to get involved with a startup. But I am surprised that Brady would choose to do that by becoming a co-founder.
Most athletes limit their involvement with startups to becoming investors, advisors, and brand ambassadors. And for good reason. Being a co-founder is a full-time job – one that’s physically, mentally and emotionally challenging. Finding the time to do this whilst playing a sport professionally, fulfilling familial responsibilities, acting as an ambassador for global brands, and serving as a role model for people the world over sounds unrealistic for one person.
But then again, athletes are unrealistic. And nobody more so than Brady, who has started in a record 10 Superbowls and won 7 of them, playing (and dominating) professional football into his mid 40s. I’m in my late 30s and I struggle to play touch rugby, let alone run the show for the Tampa Bay Buccaneers!
The nosy, slightly gratuitous part of me wonders what level of involvement Brady’s co-founder status actually entails. What’s the equity breakdown with his business partners? Will his ownership of the company vest over time? How much is he being paid? Do the Bad Leaver provisions in his employment contract cover a future return to the NFL if this season winds up being his last? It would be fun to know more and understand the concessions needed to onboard and incentivise that level of talent.
Elite athletes are extraordinary people (which is not to say they are perfect, just not ordinary). They have greater ambitions than most of us, and make great sacrifices to achieve them. For me, the thing that defines the the startup environment more than anything is learning to operate under uncertainty, and adapting to new challenges. Athletes have this in spades. The best ones are great at reinventing themselves on the pitch, and off it. Which is exactly what Brady is doing.
Athletes also understand the cultural value of what they do – the oversized impact that one special person, or a team of special people working together, can have on the world at large. Chris Dixon, an a16z partner who is joining Autograph’s board of advisors (along with his colleague Arianna Simpson, who is joining the actual board), alluded to this in a recent tweet:
The crossover between sports and startups is uncanny and insufficiently explored by investors, founders and the media. Things are changing – as the deal flow in this newsletter demonstrates – but it’s still early days. Massive objects appear on the horizon as small dots. There are opportunities to get involved with new technologies, ideas, and people who are truly transformative but yet to go mainstream. It’s a great time to get involved in this space, open our minds, and get some skin in the game.
So yes, I’m interested in investing in startups founded by athletes. Very interested. And I reckon you should be too.
Deal flow
⛓ Tom Brady's NFT Startup Autograph Raises $170M – Autograph, the NFT startup that Brady co-founded, raised $170 million in a Series B funding round. The round was led by a16z and Kleiner Perkins. Lightspeed Venture Partners’ Nicole Quinn and Katie Haun’s new firm also participated. NFTs are apparently a $44 billion market. Seems low to me.
🎾 Serena Williams to Advise European NFT Platform Sorare – Tennis legend Serena Williams has joined European NFT company Sorare as an advisor to its board of directors. Williams will provide guidance on topics including athlete relationships, expansion, and diversity and inclusion initiatives, as Sorare looks to broaden both its footprint and its offerings, with a particular eye on women’s sports.
🇺🇸 Mustard looks beyond baseball as it raises another $3.75M for sensor-free sports coaching – LA-based sports training platform Mustard closed a $3.75 million round. Led by Lake Nona Sports & Health Tech Fund, this latest raise follows a $1.7 million round back in late-2020, bringing the firm’s funding-to-date up to $6 million. New investors are Mark Cuban, OneTeam Partners, Ronnie Lott, Justin Rose, the Major League Soccer Players Association and the United States Women’s National (Soccer) Team Players Association, joining a list of existing investors that includes big name athletes like quarterback Drew Brees and pitching legend Nolan Ryan.
🏃♂️ Solana-based 'move-to-earn' startup STEPN raises $5 million in SAFT sale – STEPN, a Solana-based "move-to-earn" startup that rewards users for exercising, has raised $5 million in a seed funding round. Sequoia Capital India and Folius Ventures co-led the round, with Solana Ventures, Alameda Research, 6th Man Ventures, Sfermion, and others participating. Angel investors, including Santiago Santos, a former ParaFi Capital partner, and Zhen Cao, Asia partner of investing platform Republic, also backed the round.
🇧🇷 $32 Million Series A Funding Round For Brazilian Daily Fantasy Sports Platform – Rei do Pitaco, a Brazil-based daily fantasy sports platform known as RDP, has raised $32 million in a Series A funding round led primarily by investors from the United States that hope the company could become the FanDuel or DraftKings of Latin America.
💰 Broadcast Veteran Bob Prather Raises $175 Million SPAC For Media, Sports – Longtime local television network executive and sports marketing veteran Bob Prather raised $175 million this morning through a new special purpose acquisition company. The SPAC, Heartland Media Acquisition, is focusing on media and sports as potential targets.
🎮 Microsoft strengthens gaming, esports and metaverse push with $68.7bn Activision Blizzard takeover – Microsoft is buying video game publisher Activision Blizzard for $68.7 billion, bringing some of the world’s biggest esports titles under its control and expanding its plans for the metaverse. The deal is the largest ever acquisition in the gaming industry, dwarfing even the headline-grabbing $7.5 billion deal Microsoft reached with ZeniMax Media in 2021. Upon completion, Microsoft will become the world’s third largest gaming company by revenue, behind Tencent and Sony.
📱 HeyRenee Raises Another $4.4M in Oversubscribed Seed II Funding Round – HeyRenee, the newest health-tech innovation from Dr. Renee Dua and Nick Desai, the founders of Heal, closed an oversubscribed $4.4 million Seed II funding round led by Quiet Capital, with participation from City Light Capital, Fika Ventures, Global Founders Capital, Mucker Capital, SaaS Ventures, and Tau Ventures. HeyRenee has raised a total of $8.2 million and tripled its valuation in just five months.
🧫 Faeth Therapeutics Raises $20M to Advance Precision Nutrition Platform as A New Modality in Cancer Treatment – Faeth Therapeutics, a healthcare company developing machine learning-driven precision nutrition solutions and treatment regimens to enhance cancer therapy, closed a $20M seed financing round co-led by Khosla Ventures and Future Ventures, with participation from S2G Ventures, Digitalis, KdT Ventures, Agfunder, Cantos and Unshackled.
💻 H2U Raises $8M to Power New Health Ecosystem – Health to U, an industry-leader in connected healthcare technology and provider of digital health and wellbeing platforms, is ringing in the New Year by announcing the close of a $8 million round of funding, led by SHARP and Foxconn Technology.
👩⚕️ Withings Acquires Impeto Medical to Strengthen and Grow Its Research and Development of Medical Technologies – Withings, the pioneer of the connected health movement, has acquired Impeto Medical, a specialist in R&D, manufacturing and distribution of innovative medical devices for physicians.
🧠 Headspace Health Announces Acquisition of AI-Driven Mental Health and Wellness Company, Sayana – Headspace Health, the provider of a digital mental health platform, acquired Sayana, an AI-driven mental health and wellness company. Sayana will expand Headspace Health’s ability to provide personalised self-care content to its growing global member base.
👩💼 Diana Health Launches with $11M Series A Led by LRVHealth and .406 Ventures to Redesign Maternity and Women’s Health Programs at Leading Hospitals – Diana Health, the healthcare provider redesigning maternity and women’s health, closed $11 million in Series A financing and a collaboration with TriStar StoneCrest Medical Center, part of HCA Healthcare, one of the largest hospital systems in the US. The funding, co-led by LRVHealth and .406 Ventures, with participation from existing investor AlleyCorp, will be used to launch Diana Health’s first locations in 2022, expand the company’s technology platform and position it for rapid growth.
🃏 Amazon invests in trading-card platform Dibbs as collectibles boom – Amazon.com is investing in sports-card marketplace Dibbs, entering a booming collectibles industry as interest rises in alternative assets. The fresh funding comes as Dibbs starts a new service that allows users to buy and sell fractions of trading cards. Dibbs previously raised about $16 million from venture firms Foundry Group, Tusk Venture Partners, Courtside Ventures and Founder Collective. It also has a group of athlete investors, including the NBA’s Chris Paul and Kevin Love.
🎲 Patriots And 76ers Owners Among Investors In $12 Million Series A Round For Sports Betting App Wagr – Wagr has closed a $12 million Series A round that it will use to fund the costs associated with expanding to other states. Investors in the latest round include the Kraft Group, owners of the New England Patriots and New England Revolution; Harris Blitzer Sports & Entertainment, owners of the Philadelphia 76ers and New Jersey Devils; and several venture capital firms, including BITKRAFT Ventures, Greycroft, Pear VC and Seven Seven Six, which was founded last year by Reddit co-founder Alexis Ohanian.
🏌️♀️ Whoosh, Inc. Raises $6M to Modernize Golf Operations – Whoosh, a developer of modern golf operations software for private clubs, raised $6 million in funding led by Craft Ventures with participation from its initial investor Bienville Capital, as well as Operator Partners, Human Ventures, Alaris Capital and other angel investors. Whoosh's cloud-based, tablet-centric software helps private clubs save up to 20 hours a week and reduce overall revenue loss by streamlining operations, improving both staff and member communication, and enabling better member experiences.
👟 Ken Goldin on the Future of the Thriving Collectibles Industry – In July, Goldin Auctions was sold to Collectors Holdings, a group co-owned by New York Mets owner Steve Cohen. Terms were not disclosed, but one estimate ballparked the price at over $200 million. The deal followed a $40 million funding round in February from the Chernin Group and a slew of athlete and celebrity investors, including Mark Cuban, Kevin Durant, Dwyane Wade, Deshaun Watson, Mark Wahlberg, Logan Paul, Timbaland, and Bill Simmons.
🚣♀️ Seawall Capital Acquires Two Outdoor Sports Companies – Seawall Capital sees the growth of outdoor sports in the last few years as a growing trend – and is upping its bet on the industry. The private equity firm announced that its Kent Outdoors, which is rebranding from Kent Watersports, will acquire Kona Bicycles and watercraft seller BOTE. The two companies have revenues approaching $500 million.
⚽️ Hull City sold to Turkish businessman in ‘UK£30m’ deal – Turkish businessman and TV personality Acun Ilicali has completed his takeover of English second-tier soccer club Hull City, the Championship outfit has confirmed. The 52-year-old, who attended the FA Cup third-round defeat to Everton at the MKM Stadium earlier this month, received approval from the English Football League (EFL) at a meeting on 19th January to become the new owner.
🧠 Sanctus London secures £4.25 million Series A investment led by Scale Up Capital – Sanctus, one of the first organisations in the UK to offer proactive mental health support through 1-2-1 coaching for employees in the workplace, has closed a £4.25m investment round led by Scale Up Capital, and advised by the team at PWC Ventures. The round was led by ScaleUp Capital, enables Sanctus to accelerate its “human-first, tech-enabled” growth strategy and continue to provide high-quality coaching in the workplace.
🧃 Trendy Wellness Brand Moon Juice Is Raising $7 Million As It Targets Middle America – Moon Juice—the Los Angeles wellness brand known for its juices, skin care products and adaptogenic Sex Dust—is in the process of raising $7 million in new funding. The Culver City-based company recently secured $5.1 million in fresh capital and intends to raise another $1.9 million.
🇦🇺 Mental health startup Inspiretek eyes $50 million valuation and US launch following seed round – A Brisbane-based app designed to support mental wellbeing in young athletes has secured $2.5 million in seed funding, and it already has a hefty Series A in its sights. Inspiretek’s seed round, led by Investible, values the startup at $8.5 million.
👨⚕️ Levitee Labs Announces Non-Brokered Private Placement – Levitee Labs, an integrative wellness company with a diversified portfolio of healthcare and wellness assets, is pleased to announce that it is proposing to complete a private placement for up to CAD$3,000,000.
🎰 BetMGM to Receive $450M Investment Toward US Growth – MGM Resorts International and Entain are doubling down on their online betting venture, just as one of the biggest US betting markets opens to mobile betting. The companies are investing around $450 million in BetMGM this year, the online sportsbook that they own 50-50. The fresh cash will be deployed toward growth into new markets and new products.
Some tweets
I tapped out this newsletter in a cafe that’s also a bike repair workshop, surrounded by sweaty, hungry, elated MAMILs. Other people’s joy rubs off on you.
Yours in sports,
Ed
—
Edward Rhys
Founder / Skin In The Game
www.skininthegamegroup.com
A favour
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And if you can spare the time, get in touch with your thoughts. Whether founder, investor, or sports fan, your input will help me to improve what I’m doing and serve the Skin In The Game family better.
Skin In The Game is a startup investment club connecting investors with visionary sports, health, and entertainment startups. We provide a regulated platform for investors and entrepreneurs to collaborate and co-invest.
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.