BOSTON - NOVEMBER 14: CoachUp founder Jordan Fliegel, center, speaks with TechStars alum Dave ... [+]
Daniel Benchimol thought it was worth a shot. He had nothing to lose.
Shortly after founding the Highlights App in 2021, Benchimol applied to Techstars Boulder, an acclaimed accelerator program that has backed more than 200 startup companies since 2007. Never mind that at that point, Benchimol only knew that he wanted the Highlights App to be a place where sports fans could watch highlights in an easy-to-digest, quick manner. The company had no product, no revenue and no deals in place to show any highlights.
Still, Benchimol was sold on the idea and made it to the final round of the application process before Techstars rejected his company, as it does with most applicants. Undeterred, Benchimol late last year applied to another program run by Techstars, an investment company that runs several accelerators each year and looks to identify promising companies and entrepreneurs.
This time, the Highlights App was accepted to the Techstars Sports Accelerator, a 13-week program currently taking place in Indianapolis.
“It was probably some of the best news that we’ve had,” Benchimol said. “It's a great accomplishment.”
Since its first year in 2019, Techstars’ sports platform has become a popular program for early-stage companies looking to gain access to funding as well as a vast network of contacts.
This year, Techstars and its partners selected 13 companies to participate out of several hundred that applied. The program runs from June through August, concluding next week with a demo day at the One-Zero Sports & Tech Summit in Indianapolis, where the startups will demonstrate their products and services in front of an audience of investors and executives.
Jordan Fliegel, managing director of the Techstars Sports accelerator, said the acceptance rate for the program is lower than the acceptance rate for getting accepted to Harvard. Most of the companies that Techstars chooses receive referrals from founders who have gone through the program previously or from one of the 500 or so venture capital firms that Techstars has relationships with through its various accelerators.
Fliegel went through a Techstars program in Boston about a decade ago after he founded CoachUp, an online service that connects players with experienced coaches in several sports. They can train one-on-one or in groups or even virtually through video analysis, film review or other methods. Fliegel, a former college basketball player at Bowdoin College in Maine, also founded a venture capital firm, Founders First, that invests in early-stage companies across various industries.
For the sports accelerator, Techstars has partnered with a few organizations in Indianapolis, which has hosted the program each year and become a hub for sports technology startups. The founding partners are the NCAA, which has had its headquarters in Indianapolis since 1999; Pacers Sports & Entertainment, the parent company that owns the Indiana Pacers and Indiana Fever; Indiana Sports Corp., a nonprofit sports commission; and the Next Level Indiana Fund, which the Indiana General Assembly formed in 2017 to invest in companies.
The program’s supporting partners are the Indianapolis Colts; Indianapolis Motor Speedway; and the NTT IndyCar Series.
The partners not only have invested money in the accelerator program and helped choose the startups. They have also made numerous executives and employees available to mentor the startup founders, offering advice on how to run their businesses, treat employees, raise money and other topics.
“Indiana is a sports crazy place,” Fliegel said. “Indiana’s the home of basketball. It’s the home of (auto) racing. It’s the home of sports tourism. It’s the home of collegiate sports…Sports is like a core business in the state of Indiana, and they’re really good at it and collaborative.”
He added: “They go out of their way to make our companies feel welcome and recognized and to provide value, too, by opening up the doors…It’s not just capital. It’s also the resources and employees they have at those organizations.”
Steve Simon, a Pacers Sports executive whose family owns the company, said the Techstars Sports accelerator is a perfect fit for Indianapolis. The city has hosted numerous major events, including eight NCAA men’s basketball Final Fours (most recently in 2021), Super Bowl XLVI in February 2012 and the College Football Playoff National Championship in January 2022. Indianapolis will be the site of the 2024 NBA All-Star Game and the 2026 and 2029 NCAA men’s basketball Final Fours, as well.
Even before the Techstars program began, Simon said he approached Scott Dorsey, a longtime friend and former fraternity brother at Indiana University in the late 1980s. Dorsey was the Indiana Sports Corp.’s chairman and a successful businessman and entrepreneur who co-founded a company, ExactTarget, that went public in 2012 and was acquired a year later by Salesforce.com in a deal that valued ExactTarget at $2.5 billion.
Simon asked Dorsey about starting a program for sports technology startups through High Alpha, a venture studio that Dorsey founded that invests in early-stage software companies.
“(Dorsey) came back to me and said, ‘Hey, look, I think that’s great. We can always work on stuff together, but what if we put a consortium together with Techstars?’” Simon said.
That idea resonated with Simon, and he and Dorsey helped get the other partners involved, as well.
“Indianapolis over 20 years, in a very thoughtful way with a couple of catalysts, has become a great place to build businesses,” Simon said. “I think it’s a real piece of a differentiated DNA of the city. We’re doing a lot of things well.”
Through its involvement with Techstars, Pacers Sports has the chance to see startups up close, learn from them and invest in promising companies. Pacers Sports was an early investor in Ergatta, a connected rowing machine that was part of the first Techstars Sports accelerator in 2019. Ergatta was valued at $200 million two years ago after securing $30 million in a Series A round.
“(The Techstars program) is a nice piece of the puzzle of continuing to evolve how we’re looking at our businesses, how we’re reaching our consumers, how we’re creating content, how we’re working on engagement,” Simon said. “We’re always relentlessly curious. We’re helping (the startups), and they’re helping our insights and our thinking about how our businesses are evolving and where we’re going.”
Techstars invests $120,000 in each of the startups selected for the sports accelerator program and receives common and preferred equity in those companies. Techstars can also participate in any follow-on offerings. All told, the 44 companies that participated in previous Techstars Sports accelerators raised nearly $100 million in outside capital.
The program consists of virtual meetings on a daily basis in June, and the startups all travel to Indianapolis in July and August for the in-person portion of the accelerator. Each of the startups works with numerous mentors, including executives, investors and founders who have successfully raised money and sold their companies.
“What kind of separates us from a typical (venture capital fund) is that mentorship component, the network component,” Fliegel said. “We spend so much time with companies. We go really deep in their businesses. We’re almost like a small co-founder on their cap table.”
This year’s class includes startups in various aspects of the sports technology industry such as wearables, over-the-top streaming, ticketing and artificial intelligence.
SIQ Basketball, for instance, manufactures an official size and weight basketball that has hardware inside of it. By connecting the basketball to a mobile app, players can track how many shots they make or miss as well as the release angle, release speed and distance of each shot.
SIQ was founded in 2012 by Harri Hohteri, a computer scientist who played college and professional basketball in Finland. Hohteri is currently the company’s chief product officer, while Erik Anderson is its chief executive.
Anderson, a former Techstars employee who was an early investor in SIQ, took over as SIQ’s CEO in January 2021. Since then, the company has raised $4.5 million of funding, most of which has gone into developing the product, which Anderson said “is insanely hard to do” because the technology has to withstand the weather, temperature, impact of bouncing the ball repeatedly and other elements.
“We’ve now got the hardware to a place where we’re really happy with where it’s at and confident it’s ready to be taken to market in a large way,” Anderson said.
For now, SIQ sells its basketball on its website and through Amazon.com for $139, which includes an annual membership that gives players access to the data collected. After the first year, players must pay $99 per year for the subscription. Anderson said SIQ has about 3,000 subscribers.
SIQ is also developing a smart valve technology that can be used to expand to volleyball, soccer, football and other sports. The company is in talks to license the technology to large brands and companies that have major distribution channels and marketing experience.
Anderson said he wasn’t interested in other accelerators because SIQ has been around for a while and may not benefit from such programs, but he was intrigued at the Techstars program because it was narrowly focused on sports and not just technology in general.
“I think each company has their own goal,” Anderson said. “I’m interested in lining up the next fundraise because we’ve taken our product to market. We’ve figured out a lot of things that we need to figure out. But there’s always the serendipity of, ‘Hey, you should meet this person,’ or the serendipity of having access to people who you normally would have never even known to talk to and whatever opportunities come of that.”
While the Highlights App is at an earlier stage than SIQ, Benchimol said he was also drawn to the Techstars program as a way to learn from people who have been in the sports industry for years and succeeded at a high level.
Benchimol, a native of Argentina, worked at two streaming services (Fubo TV and Fanatiz) before founding the Highlights App in late 2021 with Humberto Ciffoni, a veteran sports rights acquisition executive. The Highlights App raised $700,000 in a pre-seed round and officially launched earlier this year in Chile, Colombia and Peru, where it shows highlights of European and South American soccer as well as tennis, golf and motorsports.
The Highlights App must strike rights deals with leagues or teams to show highlights, which can be costly and time-consuming, but Benchimol said the company may give equity in the company in exchange for rights. Benchimol is aiming for the app can launch in the U.S. and Canada by next year, although he said that depends on enhancing the product, securing rights and raising money from investors. He is hoping the people he meets at the Techstars accelerator can provide insights into the company and potentially have interest in investing in the company.
“(The connections) are gonna last for a long time,” Benchimol said. “You may not need them or what they're doing right now, because maybe there's not a good fit or you’re just too early, but maybe a year from now or five years from now, you can reach back and maybe they could help you in the future.”
He added: “You will never get to do this kind of thing. Nobody has that big of a network individually if you're just starting out. Techstars definitely does a great job of getting you in front of that person that makes the decisions at where they work.”
