SportsTech in 2020 ⚽️
A lightweight introduction to the space
One of my skill focuses goals going for 2021 is to strengthen my ability to analyze and present insights on an industry. I believe that developing that skill will strengthen my ability to comprehend and suggest strategies at the corporate level - something important as a product manager and for some of my future career aspirations. My first attempt at stretching that muscle came in late 2020 when I conducted a quick report for the sports tech space. I created a deck for it, but I will now recreate it now as a post.
Report
This report explores the SportsTech startup ecosystem in the United States. The SportsTech market has shown an upward trend with 2019 producing 100+ deals worth $600M+*. The report includes an introduction to space. SportsTech can be broken down into segments of performance, operations, and fan experience. These segments are further broken via an industry map that includes smart clothing, sports media, and others.
The report also highlights some of the most active and impactful investors. The report concludes with profiling of some of the top startups in the market.
Compared to other industries like FinTech and Artificial Intelligence, SportsTech is a smaller industry, but definitely, one that is worth watching.
I hope that the readers of the report find it useful.
* CB Insights Platform
Table of Contents
Executive Summary
SportsTech Market Map
VC Activity
Top Startups
Conclusion
Executive Summary
The effects of COVID has accelerated the investments into some segment of the SportsTech while forcing others to strategically position the businesses in place in hopes of resurgence post COVID. As demonstrated by Peloton’s success in 2020, a large opportunity exists for people who have to stay home and need to find new forms of fitness. SportsTech and in particular the connected fitness space have been a strong bed for private investment.
The SportsTech market can be broken down as either performance, organizing, or fan-focused. Investment in the space is done either by the usual names in venture capital or by firms that specialize in the SportsTech industry. The report highlights top startups, which suggests that the biggest opportunities exist in either workout improvers or Esports. This belief is reinforced by an investor preference for Wearables and Esports.*
* SportsTechX
SportsTech Market Map
In the past few years, technology has had an immense impact on numerous aspects of fitness. The impact can be felt from wearables to the fan experiences. The customer needs are clustered around the need for results, convenience, and flexibility.
Performance
This segment deals with the preparation, tracking, and performance of recreational and professional athletes.
Organization
The organization segment deals with providing operational support for the production of sports and recreation activities.
Fans
This segment deals with providing better experiences for the followers of sports. This includes providing new ways to experience sporting events as well as while as news content.
The market map on the coming pages is not meant to be exhaustive of companies in the space, but instead a representative sampling.
VC Activity
The investor map for the SportsTech is not very different from that seen in other high growth industries. At each of the stages of funding, you will find the big players as well as SportsTech specific funds. To make the decisions on the big players in the space I combined data from CB insights for activeness, investment sizes, and investments in highly promising startups as designated by this report. I focused on the initial stages of investment: accelerator, seed, and venture capital (post-seed).
Sources: CB Insights and Drake Star Partners
Top Startups
The review of the top startups did not incorporate the stage of the startups. Instead, the list includes startups at various stages that show strong potential. The three elements that all the startups had common are a strong idea, progress, and team. The report focuses on ten promising startups, but they are not ranked among the selections.
Idea
This is a personal assessment that the idea solves a customer problem that customers are currently trying to solve.
Progress
For companies that have been around for a few years, attention was put on publicly available data around progress.
Strong Lead Investor:
Most of the startups that are included have strong and recognizable investors as financers. This does not mean that they fail-proof, but at least others in the investment field have also found them quality investments.
Strava
Strava allows users to tack exercise, generally cycling and running while incorporating social network aspects.
Investment Assessment:
The team is going after a definite need which is the tracking of exercise and then includes the benefits of a social network. The desire for the product is supported by continued growth. A con, however, is that the investment amount desired will be large given the maturity of the company.
Zwift
Zwift combines online gaming and physical training. Zift offers cycling and running programs that allow users to train and compete in a virtual world.
Investment Assessment:
Zwift provides many of the known trends of SportsTech - convenience and flexibility - while still allowing a social aspect. Similar to Strava, investments into Zwift will be growth stage investments.
Aaptiv
Aaptiv provides a curated workout that combines both workout and audio selection. Apptiv’s goal is to provide both motivating and fun workouts.
Investment Assessment:
Music and workouts are often combined. Aaptiv’s hypothesis that workout that natively incorporates music has shown strong traction with 2M+ users.
PlayVs
PlayVs is building the platform necessary for high school esports. Along with building the technology to support competitions, it works with high school organizations to build sanctioned leagues.
Investment Assessment:
Esports will surely continue to grow in size. One of the groups that is most invested in esports is high schoolers. As both an operational and technology player, PlayVs has a lot of room to make an impact in Esports.
Classpass
Classpass provides access to an assortment of fitness classes via a flat-rate monthly bill. A health club aggregator its classes span over 30,000 health clubs.
Investment Assessment
Classpass is currently hurting as COVID has forced many workout suites to close. However, it is safe to say some portion of the market will come back and Classpass can rebuild as an aggregator.
Athos
Athos via smart clothing measures how hard muscles are working. The end goal is more effective training.
Investment Assessment:
Athos’ value proposition is more effective training. From elite athletes to the common gym goer that is a very appealing value proposition. The smart apparel unlike tracking software has the potential to correct and not just count. The expectation is that Athos will serve the high end of the market before pursuing the lower end.
Aensei
Asensei is a company that wants to convert connected clothing into a coach. The first product offering focuses on improving the performance of rowers.
Investment Assessment
The market for Asensei is incredibly appealing. Pretty much any sport that has an element of form can benefit from technique critique.
SeatGeek
SeatGeek is a mobile ticket platform that allows users to buy and sell event tickets. SeatGeek differentiates itself by providing technological innovation that enhances the event experience.
Investment Assessment:
SeatGeek’s technology and partnership focus make it a strong player in the ticketing space. Like other physical event-related startups, COVID has made operating difficult of late, but SeatGeek should respond well as venues open up.
Vindex
Vindex is an e-sports platform. Vindex’s mission is to to the infrastructure on which e-sports experiences are developed upon.
Investment Assessment:
E-sports comes to be a part of popular culture for many around the world. As the field continues to grow, companies will need to be the enablers of the space. With a team that has extensive experience in e-sports, Index appears like a strong candidate for that mission.
100 Thieves
100 Thieves is a lifestyle and esports organization. 100 Thieves has teams competing in most of the large esport competitions.
Investment Assessment:
A lifestyle and apparel brand that is esports native is a very interesting opportunity. As the esports market continues to grow there will an opportunity to sell apparel in the same way that current sports leagues do.
Conclusion
From smart clothing to esports, startups are transforming how we workout and the definition of sports.
Even before COVID, customers have been pursuing ways to get tangible workout results, but in a convenient and effective manner. Similarly, what we consider sports and how we experience them is constantly changing.
Startups, not limited to the ones highlighted, are stepping up to meet customer needs.