Golf Genius, the Delaware County technology company backed by pro golfer Rory McIlroy, has made its largest acquisition yet as it ventures into the direct-to-consumer space and ramps up international expansion.
The Wayne-based company may be the biggest name in golf that the typical player doesn't know. Millions of golfers use the software every year to post their scores and track their handicaps, and thousands of clubs use its technology to manage tournaments and pro shops. Golf Genius last week acquired Shotzoom, which owns Golfshot and CoachNow, adding millions more users between the two platforms.
Shotzoom, based in Phoenix, was purchased by Golf Genius for a combination of cash and stock, with the stock portion of the deal valued at $23.75 million, according to a filing with the U.S. Securities and Exchange Commission. Shotzoom will operate as a division of Golf Genius, which will add some 25 employees in the deal to bring the company's total headcount to about 260.
Golfshot works with an Apple Watch and uses GPS to track shots and swing data, amassing a following of some 8 million registered users and GPS capabilities on 45,000 golf courses. CoachNow is a video platform with a suite of tools that helps some 2,100 coaches in more than 50 sports analyze and instruct their athletes. While six existing Golf Genius products are primarily sold to clubs and used widely by the USGA, the acquisition of the Shotzoom platforms brings a consumer-facing element to the business. It also pushes international expansion for Golf Genius, as co-CEO Mike Zisman said that about 60% of Shotzoom's business is done outside of the U.S.
Golf Genius was founded in 2009 by Mike Zisman, but growth has tracked with the takeoff in popularity of golf spurred by the pandemic. The Shotzoom deal is the company's ninth acquisition and is "by far the largest," said Zisman, who helms the company with co-CEO Chris Kallmeyer. McIlroy, long one of the top-ranked golfers in the world, took part in a $5 million round in 2020 and another $6 million follow-on round in 2022.
Golf Genius built out the software system that handles handicapping for the USGA, implemented in 2020. That came after Golf Genius struck a deal with the national organization to use the company's tournament management software rather than run its own. Partnerships with the USGA and more than 10,000 golf clubs across the world have allowed Golf Genius to primarily work behind the scenes of the sport, but the Shotzoom acquisition puts the company in the direct-to-consumer space.
Zisman said conversations with Shotzoom CEO Ben Addoms started about a year ago, stalled and then resumed over the summer.
Shotzoom's GPS-enabled Golfshot technology could have been seen as a competitor to the USGA's Golf Handicap & Information Network, the handicapping software that Golf Genius created that also incorporates GPS technology. Zisman said that his team navigated their USGA relationship to convince the organization that Golfshot's millions of registered users presented an opportunity to market the handicapping software and hit USGA's goal of doubling the number of golfers with handicaps in the next three to five years.
"Our business relationship with USGA is based on the number of handicap golfers, so more golfers — it's a win-win situation for everybody," Zisman said. "As I often say, when you do a transaction, make sure everyone is aligned on the same side of the table, that the incentives are the same for everybody."
Zisman has master's and doctorate degrees from the University of Pennsylvania and was previously a faculty member at Massachusetts Institute of Technology. He founded software company Soft-Switch in 1979, which was acquired by Lotus Development Corporation in the early 1990s. Zisman became CEO of Lotus Development Corporation, then moved into a vice president role at IBM after it acquired Lotus in 1995.
Zisman founded Golf Genius in 2009, originally as a platform to organize small golf trips. It was a relatively small market, Zisman found, and in 2012 the company rolled out a software product that managed leagues and tournaments for golf clubs. That market has proven to be much larger, with the software managing 950,000 golf events and 37 million rounds of golf in 2023. The platform is used by nearly all of the private clubs in the Philadelphia area including Merion Golf Glub, Philadelphia Cricket Club and Aronimink Golf Club.
The company has organically grown some 20% to 25% each year for the past few years. Zisman said his goal is 20% year-over-year growth and a 20% profit margin, which the company is "very close" to. He declined to disclose specific revenue numbers.
More inorganic growth could be on the horizon as well for Golf Genius in 2024.
"I'd like to say we're going to do two more acquisitions this year. I think that's a very good estimate," Zisman said.
