Tyrre Burks attended Winona State University, was an outstanding football player and went on to play pro football in Canada. But he was plagued with injuries throughout his playing years and, at just 24, had to hang up his cleats for good and move back to his hometown of Chicago.
His experience, however, prompted him to start the nation’s first universal health management and compliance app for young athletes, called Player’s Health. Coaches, trainers, parents and athletic directors can monitor the health and progress of an injured player. Parents are instantly notified the moment their child has been injured.
While kicking it off, Burks heard about Sport Ngin, a Twin Cities company with a parallel mission, and ventured north to meet its co-founder and CEO, Justin Kaufenberg. As he looked around Sport Ngin’s headquarters and saw hundreds of employees—and heard about similar, albeit smaller startups in the area—Burks called an audible and decided that his business needed to be here instead of Chicago.
“I was like, ‘I’ve got to figure out how these guys did it.’ Because we want to be the next Sport Ngin,” says Burks. “That’s exactly why we came up here.”
He’s not alone. The Twin Cities has quietly become a mecca for sports tech entrepreneurs, with more than two dozen companies building new platforms, services and products. The Pitch, a short-lived co-working sports tech incubator in Minneapolis, emerged as a nucleus for many startups in the sector.
Worth magazine noted in 2017: “While Minneapolis-St. Paul isn’t about to topple the nation’s well-established coastal tech capitals, it’s definitely a force to be reckoned with when it comes to sports tech.”
Burks and other entrepreneurs are building on a foundation established by more recent upstarts such as Sports Ngin [pronounced “EN-jin”] but also one of the world’s pioneers of mixing sports and tech: Fanball (see “Sports Tech Godfathers” page 26). And they’re out to serve a rapidly growing industry (see “Sports Tech Industry Heal Thy Self: Where Are Your Stats?”
Sport Ngin kickstarted the current local sports tech trend in the Twin Cities by developing an intuitive team-management website and app for sports teams, players and parents to use to keep track of schedules and stats. Founded in 2008, it grew quickly, attracting $39 million in venture capital and topping 5 million registered and active athletes before being sold to NBC Sports in July 2016 for an undisclosed sum.
The company remains based in Minneapolis and now employs about 450 people, primarily in Minnesota. (At the time of the deal, Sport Ngin had about 250 employees.) NBC immediately rebranded the company as SportsEngine.
“There was no market for sports and tech before those guys,” says Scott Litman, a serial technology entrepreneur and co-founder of MN Cup who was an early investor in Sport Ngin.
The company began as TST Media Inc. and did not seem destined for greatness; potential investors did not see youth sports as a particularly lucrative market.
“It was a tough sell back then,” recalls Carson Kipfer, a co-founder of the original company who remains with SportsEngine as principal designer.
It found the financing, however, and Sport Ngin’s ability to scale its business and draw millions of users demonstrated there’s money to be made in youth sports. Since then, youth sports has become a $15.3 billion industry, according to WinterGreen Research; the National Council of Youth Sports estimates an estimated 60 million kids participate in youth sports programs each year.
“What those guys started at Sport Ngin has definitely been making an impact and inspiring other entrepreneurs to go into that space, which is really cool,” Litman says. “As a parent with kids in sports and as a coach in youth sports, you can’t run a league without seeing their software.”
NBC Sports plans to promote SportsEngine with TV ads during the 2018 Winter Olympics.
Meanwhile, another local sports tech company also made it to the major leagues in recent years. Minneapolis-based SportsData started compiling data for fantasy football players and media companies in 2010 before being acquired in 2013 by Sportradar, a global company based in Switzerland. The company’s downtown Minneapolis office serves as headquarters for Sportradar US. Sportradar has more than 1,900 employees globally.
SportsData got its modest start by paying college kids to watch games on television to compile data.
“The biggest thing that has changed for us is, really, scale. When we were acquired, Sportradar just brought us an enormous amount of credibility,” says Dave Abbott, a SportsData co-founder who is now Sportradar’s senior vice president of innovation and product integration. “When we were just small, SportsData out of the University of St. Thomas, it was tough to get the NFL or NBA or someone like that interested in us.”
At the time of the sale, Abbott says the company had about 20 full-time employees and 100 part-timers. That has now grown to 150 full-time staffers with 120 part-time workers.
Today Abbott sees new frontiers for sports data. He points to player-tracking data from the NFL (through chips in shoulder pads) and the NBA (via cameras above the courts). “We’re at a crazy, exciting time,” says Abbott. “Now you can really, truly quantify where the players are … it’s allowing us to generate a whole new raft of statistics around the game. I think that in the next five years we’re going to really, truly change the vocabulary of how we describe the game.”
“Over the last decade, [we] have started to see a lot more of these startups emerge,” says Kipfer of the Twin Cities sports tech industry. “There’s actually a pretty solid community here in the sports tech space.” Yet a big gap remains between SportsEngine and Sportradar, and the emerging generation of Minnesota-based sports tech companies that seek to follow in their wake.
The fledging firms want to get off the sidelines and onto the sports tech playing field. Like startups in any sector, they don’t have much revenue. They want to draw fans. They are hoping to get scouted and drafted by investors. The leaders of the young companies sound like head coaches talking up the next season: They have a great team. They plan to outsmart the competition. They have a strategy to win. Now, will they beat the odds?
The four that are the most promising right now are Player’s Health, Starting 11, MatBoss and Team Genius.
Minneapolis-based Starting 11, which created a fantasy soccer playing app, has been in business for less than a year and had no revenue as of mid-December.
But company CEO Teague Orgeman is thinking big and looking to the World Cup, being held this summer in Russia. Orgeman says it could offer a worldwide stage; the 2014 World Cup was watched on television by 3.2 billion viewers.
“We’re going to have contests for that available in a number of different countries,” says Orgeman, who quit his job as a lawyer in May 2017 to help start and lead the new company.
Starting 11 won the high-tech division of the 2017 MN Cup entrepreneurial competition, rising to the top of the 60 companies that submitted plans in that category. The award meant $30,000 and access to the broader business community.
MN Cup does not have stats tracking sports tech entrants, but John Stavig, director of the Gary S. Holmes Center for Entrepreneurship at the University of Minnesota’s Carlson School of Management, says that judges saw a marked increase in sports tech submissions in 2017.
In contrast to most fantasy sports, Starting 11 is a daily game and allows users to make substitutions while a match is in progress. Most people associate fantasy sports with NFL football, but it’s a different story outside the U.S. Orgeman notes that the United Kingdom’s Premier League has 5.6 million users for its own fantasy platform.
“For us it’s really about scaling,” says Orgeman. “It’s about the ability to be able to successfully market what we’re doing internationally.”
Starting 11 is planning to seek $2 million in a financing round in the first quarter of 2018.
In the beginning, there was Fanball.
Back in 1993, there was no sports tech industry. Two local fantasy football players, Rob Phythian and Paul Charchian, created Fantasy Football Weekly, which later became Fanball.com. It started as a weekly magazine with stats for fantasy players. The Twin Cities was an early hotbed for fantasy football players.
“It’s always more popular in cold-weather cities,” says Charchian. Charchian and Phythian are arguably two of the godfathers of today’s sports tech companies in Minnesota.
As technology expanded, Charchian and Phythian went online with Fanball.com, which rode the ups and downs of the dot-com explosion and the “dot-bomb” implosion. Fanball filed bankruptcy in late 2001 After rebuilding the company, they ultimately sold to a U.K. group in 2005 for $22 million, including earnouts.
Phythian and Charchian departed in 2007. Phythian went on to cofound SportsData, which was sold to Sportradar in 2013. Charchian launched LeagueSafe, effectively a digital escrow tool for fantasy players playing for money online.
gital escrow tool for fantasy players playing for money online. Another Phythian fantasy sports venture, Minneapolis-based SportsHub Technologies, acquired LeagueSafe in November 2016. SportsHub operates gaming sites and works with media companies to develop interactive games and mobile apps.
In early January, SportsHub announced it was buying the MFL10s line of business—draft software for fantasy players—from MyFantasyLeague. The deal marked the sixth acquisition for SportsHub since it started in early 2016.
SportsHub Technologies founder and CEO Phythian says that local investors are a big reason why the Twin Cities is seeing growth in sports tech companies: “We have a rare mix of supportive angel and strategic investors that are willing to back entrepreneurs,” says Phythian.
SportsHub was also based at the Pitch, but has since moved to the North Loop of downtown Minneapolis. Coming full circle, SportsHub acquired the Fanball name again through the March 2016 acquisition of CDM Sports.
Both are now considered elder statesmen in the business of fantasy sports. Charchian is the current president of the Fantasy Sports Trade Association.
“I talk to a lot of startups and try to offer some historic perspective,” says Charchian. “There’s still tremendous opportunity for people that want to innovate.”
Although sports tech’s stock in trade is metrics, definitive stats detailing the true scale of the emerging sports tech industry remain elusive. Data for subsets is available, however. The sports analytics market alone has been growing at about 40 percent a year. Smart sports products and other fitness wearables accounted for $3.5 billion in 2014, which is expected to grow to $14.9 billion by 2021, according to a recent study commissioned by Market Reports Hub.
A recent report from Deloitte explains this growth by the proliferation of alternative ways people can watch pro sports events and how these new methods also allow for new kinds of engagement.
“For example, 52 percent of all sports fans say they will use a smartphone or a tablet to access sports-related content while watching televised sports, up from 36 percent in 2012. Moreover, 66 percent of devoted fans go online at least once a day for sports content,” the report says.
Accessing real-time updates and highlights on social media also is growing rapidly: “The overlap of mobile, digital and social media technology is not only changing the way sports is consumed but is also allowing fans to get in on the action.”
Greater participation is also being fostered by online fantasy leagues, which are now multibillion-dollar subsectors. The fantasy football market is estimated at $40 billion and $70 billion a year.
The sports tech sector in the Twin Cities is largely a guy’s game. One notable exception is Minneapolis-based Sportsdigita, founded and led by Angelina Lawton. The company offers teams data and digital tools to improve marketing, ticketing and social media presence.
Many of the companies highlighted in this story shared co-working space at the Pitch, a short-lived sports tech incubator next to Sport Ngin’s office in northeast Minneapolis.
Sport Ngin helped create the concept to help local startups, just as the company was about to be acquired by NBC Sports. A June 2016 press release for the Pitch outlined ambitious goals calling it “a sports tech innovation center designed to be the nation’s hub for cutting-edge sports tech startups, businesses, entrepreneurs and developers.”
But the space closed at the end of December, after an 18-month run. SportsEngine (Sports Ngin’s new name) needed the space to accommodate continued growth, says its co-founder, Carson Kipfer. The Pitch program will still offer networking and mentorship for aspiring sport techies.
“At its height, we probably had 70 people in here,” says Kipfer. “Probably 15 companies were represented in some capacity.”