The Twin Cities metro is becoming a hub for sports apps

Courtesy of Twin Cities Business
Left to right: John Peterson of MatBoss, Teague Orgeman of Starting 11, and Tyrre Burks of Player’s Health.

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?”

Firing up the Ngin

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.”

Up to Bat

“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.

Starting 11

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.

Twin Cities BusinessMN 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.

This article is reprinted in partnership with Twin Cities Business.

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