Impact in sports investing – Sneaker-Rental Platform – Live Sports Prediction – Virtual cardiology – Biomarker-based mental health tech – AI music tech – Sushi-grade cultivated salmon
Week 37
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 investment club that connects sports investors with industry experts across emerging technologies like the Metaverse, Web3, AI, and Psychedelics.
We’re currently raising a pre-seed round to re-engineer sports investing. Get in touch to find out more.
*** Also scoping out a new subscription product for startups and investors – for an affordable monthly subscription founders get access to a dedicated newsletter; sports investment database with data on deal flow and investors across sports / health / entertainment; and office hours to get practical advice on fundraising from yours truly. If you’re up for trialling the product for a juicy discount, let me know. ***
Confessions
Just had a great call with a friend of a friend who’s working at a top sports marketing agency. We got stuck into the impact of private equity investment on rights holders… and the lack thereof. Call it the impact problem.
Most/all investors claim to add value to their portfolio investments and make a positive impact, even if this is couched in the obscure language of “asset optimisation”. But my friend made the point that few PE firms actually create value in top tier sports – they rely on structural growth for returns. This is the financial equivalent of buying a dilapidated albeit romantic cottage and praying the market goes up (yes, I speak from experience here)…
The impact problem scales down to early-stage sports investing too. Founders are naturally skeptical of investors’ promises that they can accelerate things. Most generalist VCs claim to do this, few actually do.
That’s why I believe that verticalised investment businesses have an unfair advantage – by exploiting the network effects that come with deep, narrow expertise in one investment vertical. And by unleashing the power of industry experts who can actually make a difference.
Expertise comes in many shapes and sizes. It doesn’t necessarily mean a PhD from a prestigious university – it might be technical (e.g. DTC sports technologist), multi-disciplinary (strategy consultant), financial (corporate financier), operational (ex-founder / operator), or domain specific (former athlete).
Expertise is as likely to come from failure as success (older people often make great advisors because they have learned hard lessons, have less time to make new ones, and understand the stakes are high). The School Of Hard Knocks is the world’s greatest learning institution, it just doesn’t play well on LinkedIn.
Founders get that. They’re pragmatists who understand risk/reward better than statisticians. They’re not fussed about degrees and CVs and who you know. Yes they want investment capital but they have a preference for smart money from problem-solvers, doers, people who can make a real difference without micromanaging them.
I believe this applies to the top of the sports food chain as much as the bottom. As it pushes inexorably into sports, Big Finance needs to do a better job of recruiting domain experts across the eco-system and crucially, creating the right incentives for long term partnership.
Sports is special. It’s different to other industries and demands a different set of tools. Less financial engineering, more actual engineering. The delicate magic of athletic competition should be enhanced by technology, not destroyed. That means bringing in people who understand the experiences that technology can create, not just the costs it can eliminate.
Winners, losers, everything, and everyone in between. We all have rich treasures buried in our networks. But do we have a way to extract that brainpower, that expertise, that wisdom? Can we put it to work to drive value creation – to build wealth and impact?
Imagine if we could collectivise as founders, investors, and industry experts to collaborate and co-invest in the future of the sports industry. Imagine if we could align interests and work together in the light, rather than plugging away in dark silos. What would we call that?
I’d call it Skin In The Game.
Deal flow
🎲 Live Sports Prediction Startup nVenue Raises $3.5 Million – In-game predictive analytics provider nVenue has closed a $3.5 million seed round co-led by KB Partners and Corazon Capital. nVenue is a graduate of Comcast NBCUniversal SportsTech Accelerator’s inaugural cohort in 2021. nVenue uses machine learning algorithms that draw on historical statistics and live game data to generate probabilities for the next on-field action.
👟 KYX World, a Sneaker-Rental Platform, Raises $3 Million – KYX, a sneaker-subscription platform, has raised $3 million in a second seed funding round that values the company at $16 million. SeventySix Capital, a venture-capital firm that focuses on sports technology, led the round. Last June, Los Angeles-based KYX raised $1.75 million in an initial seed funding round at a valuation of $7.75 million.
💵 Fanatics valuation hits US$27bn following latest funding round – The new financing values the digital sports platform at US$27 billion and included investment from BlackRock, Fidelity and Michael Dell’s MSD Capital. Previous investors in the company have included US investment company Silver Lake, rapper Jay-Z and his Roc Nation entertainment company, Japanese conglomerate SoftBank, and Eldridge owner Todd Boehly.
👩🎓 Georgia Tech Aims to be ‘Startup U’ With Sports-Focused VC Fund - Georgia Tech is launching a sports-focused venture fund backed by deep-pocketed donors as the latest step in efforts the school says will help its intercollegiate athletes. The new GTAA Venture Investment Fund gives donors the opportunity to invest and incubate early stage, sports-focused startups founded by Tech students and alumni.
⚽️ Conway SPAC Seeks Euro Soccer Club Despite Public Market Doubts – Counter Press Acquisition, the SPAC formed by Hollywood financier Paul Conway and former Tampa Bay Rays executive Michael Kalt (Rays owner Randy Frankel, Los Angeles Dodgers president of baseball operations Andrew Friedman and Angel City Football Club co-founder Julie Uhrman are also part of the management group), has set out on its mission to buy a material minority stake in a European football club.
👔 Apollo Global Has Explored Launching Sports Private Equity Fund – Apollo Global Management has explored launching a stand-alone sports private equity fund.
🎾 Serena Williams’ Venture Capital Fund Raises $111 Million – Serena Ventures, a VC firm founded by tennis legend Serena Williams, has raised $111 million for its inaugural fund. The firm is building on a nine-year history of angel investing, which included financial tech companies Propel and Cointracker, as well as video education company MasterClass. Individually, the 23-time Grand Slam event winner has also recently invested in bitcoin rewards app Lolli and TracFlo, a workflow operations app.
🏍 Mubadala Capital Invests $50M in Motorcycle Racing Series – The FIM Supercross World Championship, a new motorcycle racing event, just received major financial backing. SX Global, the Australian-based company that will oversee the event’s promotion and development, announced it has a new investor in Mubadala Capital.
🏃♂️ iFIT Health & Fitness Announces $355 Million Capital Raise – iFIT, a global leader in connected fitness and interactive content with its extensive portfolio of iFIT and Sweat streaming platforms, and its highly innovative equipment brands NordicTrack and Proform, closed a significant capital raise anchored by L Catterton, the largest global consumer-focused private equity firm.
❤️ Verily co-founder grabs $22.6M for virtual cardiology care startup Story Health – Specialty digital health startup Story Health has raised $22.6 million in series A funding for its virtual cardiology care platform. Northpond Ventures and B Capital Group co-led the series A round, joined by LRVHealth and existing investors Define Ventures and General Catalyst.
💬 Kintsugi banks $20M to scale up voice biomarker-based mental health tech – Startup Kintsugi is using artificial intelligence to build smarter mental health care by helping clinicians detect depression and anxiety in patients more quickly using just their voices. The company banked $20 million in series A funding led by New York-based global venture capital and private equity firm Insight Partners. Acrew Capital, Darling Ventures, Citta Capital, Side Door Ventures, Primetime Partners, IT Farm, AngelList Fund and Alpha Edison also participated in the round.
👩⚕️ Cigna plans to invest $450M in venture arm for digital health, analytics – Cigna plans to give its venture capital arm a $450 million boost as part of its strategy to increase the company's shareholder value and deliver long-term growth. The company is eyeing targeted bolt-on or tuck-in acquisitions along with investments in earlier-stage companies through Cigna Ventures.
🎧 AI music tech startup LifeScore raises £11m to ‘soundtrack life’ – The round was led by Octopus Ventures, with participation from Warner Music Group, IDEO and 4 Good Ventures. Additional investment was received from existing investor Metaplanet Holdings OÜ, an early backer of the company. This brings the total funding raised by the company to £12m.
🇷🇴 Romanian startup Hyperhuman announces new investment round – Hyperhuman, the smart video content company for the health and fitness industry, announced that it is raising a EUR 0.7 million investment round led by Sparking Capital and backed by Early Game Ventures and SeedBlink investors.
⛓ American Express Ventures is doubling down on Web3 – With Harshul Sanghi retiring at the end of March after building Amex Ventures for more than a decade, the incoming head says that Web3 – short for the next generation of the internet built on blockchain – will be a core area of focus for the $1.3 billion corporate fund.
🎢 Indie Game Studio Thatgamecompany Raises $160 Million to Build a Virtual 'Theme Park' – Santa Monica-based indie gaming studio Thatgamecompany has raised $160 million as it seeks to parlay games like “Sky: Children of Light” into a “theme park”-like metaverse experience. The funding was led by private equity giant TPG – which invested through its tech-focused, $1.5 billion Tech Adjacencies fund – and venture firm Sequoia Capital.
⚽️ AllTokenFootball, A Fan-Centric Digital Ecosystem for Sports Practices, raises – The investment company coinIX, which specialises in investments in digital assets and blockchain technology, is expanding its portfolio by investing in AllTokenFootball.
💆♀️ German startup that offers digital physiotherapy receives $1.5 million booster for US expansion – Berlin-based health tech startup Exakt Health has received $1.5 million funding. The pre-seed round was led by BackBone Ventures and saw the participation of Auxxo and existing investors, including Possible Ventures, N26 founder Maximilian Tayenthal, Cornelia Hoppe and Gloria Bäuerlein.
💰 Authentic Brands Group finalises Reebok acquisition – Authentic Brands Group has announced the completion of its acquisition of Reebok from Adidas, as the global brand development, marketing and entertainment company ushers in its largest acquisition to date.
🎮 Netflix Buys ‘Stranger Things: Puzzle Tales’ Game Studio Next Games for $72M – The subscription streaming giant is buying Finland’s Next Games, in a deal that values the game developer at about $72 million. Next Games, which was founded in 2013, specialises in mobile games and is best known in the U.S. for a game based on Netflix’s intellectual property, Stranger Things: Puzzle Tales. The company had revenue of about $30 million in 2020, mostly from in-app purchases.
🎮 Bandcamp Acquired by Fortnite Maker Epic Games – Bandcamp – the digital music retail site and media platform – has been acquired by Epic Games, the video game and software developer behind Fortnite, Unreal Engine, and more.
📱 iCandy acquires 51% stake in mobile game developer Storms – Singapore-based startup Storms announced that mobile game publisher iCandy has acquired 51% of its stake. Founded in 2020, Storms was created by Singtel, Advanced Info Services, and SK Telecom, the mobile game developer has gone on to release casual title AZ Run.
🧫 Ro Acquires Sperm Analysis and Storage Company Dadi to Offer a Suite of At-Home Fertility Services – Ro, a direct-to-patient healthcare company, announced the acquisition of Dadi, a fertility company specialising in the facilitation of sperm testing, analysis, and storage. The deal follows Ro's recent acquisition of Modern Fertility, one of the country's fastest growing women's health companies.
🇺🇸 Wellness icon Deepak Chopra teams up with renowned investor and psychedelics entrepreneur Christian Angermayer to back The Healing Company's bold vision – The company has united a pioneering group of disruptors, entrepreneurs, and healers to fuel its aims, with global holistic medicine leader Deepak Chopra becoming scientific advisor alongside backers including renowned investor and psychedelics entrepreneur Christian Angermayer through his Apeiron Investment Group.
👩💻 Omada Health Closes $192 Million Series E Financing to Bring Virtual-First Care to Millions – Omada Health, a chronic care integrated healthcare provider, announced its $192 million Series E funding round led by Fidelity Management & Research Company with participation from aMoon, existing investors Perceptive Advisors, Wellington Management, Civilization Ventures, and others.
🏋️♀️ Youth Fitness Startup Hiveclass Raises $1.25M in Seed Round – Hiveclass, a New York-founded startup addressing inequities in youth sports and wellness education, raised $1.25M in a seed round led by Appia Ventures.
🍛 SoftBank-backed Gousto in $230 mln secondary placing – British recipe box company Gousto has completed a $230 million secondary placement, led by existing investor Japan's SoftBank.
🦞 Wildtype Sets Course to Bring Cultivated Seafood to Market with $100 Million Series B Funding Round – Wildtype, a startup creating sushi-grade cultivated salmon, completed a $100 million Series B funding round, the largest for a cultivated seafood company. The round was led by L Catterton, and includes investments from Leonardo DiCaprio, Bezos Expeditions, Temasek, S2G Ventures Oceans and Seafood Fund, Robert Downey Jr.'s FootPrint Coalition, Cargill, and several prominent chefs and professional athletes. Existing investors, including Spark Capital and CRV, participated in the round.
🇺🇸 NexPhase Capital-Backed KnowFully Learning Group Acquires American Fitness Professionals & Associates and Psychotherapy.net – KnowFully Learning Group, a NexPhase Capital-backed company and a leading provider of continuing professional education, exam preparation courses and digital learning solutions to the accounting, finance and healthcare sectors, announced the acquisition of two companies in the health field – American Fitness Professionals & Associates, and Psychotherapy.net.
🧀 Good Culture Secures $64 Million with Series C Funds, Celebrity Investment – Good Culture, the clean-label cultured foods brand credited with revolutionizing cottage cheese, is thrilled to announce the completion of $64 million in Series C funding led by Manna Tree, with participation from SEMCAP Food & Nutrition and celebrity investor Kristen Bell, a superfan of the brand.
⌗ $20M to Bring Root Cause Medicine to the World – Rupa Health has raised $20M from Bessemer Venture Partners, First Round Capital, Lachy Groom, SV Angel and other phenomenal partners to grow the company and continue to move healthcare in this direction.
💼 Paraclete Raises $1.5 Million to Launch the World's First SoulCare Platform – Paraclete, the world's first SoulCare platform for the workforce, closed a $1.5 million pre-seed round to help workers live a thriving life at work, home, and everything in between. The round included investments from Sovereign's Capital, Tom Blaisdell, formerly a General Partner at DCM Ventures, and Henry Kaestner, Co-Founder and former CEO at Bandwidth, alongside several members of Potomac Angel Capital, including Paul Farrell and Todd Bramblett, the Co-Founders of Nehemiah Security.
🍗 99 Counties taps regenerative agriculture trend for meat marketplace – 99 Counties will officially launch in September with 15 farms, buoyed by the recent closure of $3.8 million of pre-seed funding in a round led by OMERS Ventures, with participation from Union Labs, GV and Supply Change Capital.
🇲🇽 Mexican-inspired beverage startup secures $7 million – Beverage startup De La Calle has raised $7 million in funding to expand its product line and national retail footprint. Founded in 2020, De La Calle produces tepache, a fermented pineapple drink based on a centuries-old Mexican street treat. The funding round was led by KarpReilly, a private investment firm, with participation by HERE Studio, a branding agency founded by Mr. Matthews; and DrinkPAK, a contract manufacturer of alcoholic and non-alcoholic beverages.
🧀 British start-up Better Dairy to develop vegan hard cheese after raising $22M – London-based dairy-free company Better Dairy is set to disrupt the vegan hard cheese market after securing $22M in its latest Series A funding round. Investors who contributed include Vorwerk and RedAlpine, who both led the round, as well as Happiness Capital, Acequia Capital, Stray Dog Capital, and Manta Ray.
🕶 XRHealth Secures $10M in Funding to Expand Virtual Reality Healthcare Treatment in the Metaverse – XRHealth, the gateway to the healthcare metaverse, raised $10M in funding to expand virtual healthcare treatment in the Metaverse. The funding was backed by HTC, Bridges Israel impact investment fund, AARP, and crowdfunding on StartEngine.com and existing investors.
Some tweets
England’s cricketers are touring the Caribbean and it’s the perfect antidote to cold, grey days in Bradford-On-Avon. Looking forward to excessive moaning about English batting, a bowling attack deprived of Anderson, Broad, and Robinson still somehow over-delivering, and lots of tear-jerking tributes to the late, great magnificent Shane Warne. Like all truly great sports people, his death takes with it a small piece of all of us. I will forever associate him with sunshine, booze, bad behaviour, and above all, the gorgeous physics of leg-spin.
Yours in sports,
Ed
—
Ed Rhys
Founder / Skin In The Game
www.skininthegamegroup.com
A favour
I hope you enjoyed this newsletter. If you did, please share with friends who you think will get something out of it.
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 better serve the Skin In The Game community.
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.