This story is part of Chicago Inno's 'Inno on the Road' series, which ran in December and looked at the tech and startup scene in Minneapolis-St.Paul, Minn. You can see all Twin Cities tech stories here, and other Inno on the Road series here.
When a major tech company outside Silicon Valley is acquired, it’s often a turning point for its home city as well: Will it move away or be dissolved by its new owner, or will it stick around and bolster the local tech community?
So when SportsEngine (formerly called Sport Ngine), a Minneapolis-based tech company that creates applications for sports organizations that had raised $39 million in funding and has over 5 million active users, was acquired by NBC Sports this summer, the question loomed: What would be the local impact from one of the Twin Cities startup success stories?
Five months after the acquisition, SportsEngine is not only sticking around and growing in Minneapolis, they’re setting the groundwork for Minneapolis to be a hub of sports tech nationwide through The Pitch, a sports tech coworking space run directly next door to SportsEngine’s headquarters in Northeast Minneapolis. Launched this July, it's the only sports-focused coworking space in the country, and could help make Minneapolis, thus far a strong, though still second tier, tech community, into a destination for startups nationwide.
The space, also backed by Rally Ventures (a Minneapolis VC firm that was an early investor in SportsEngine), serves a dual purpose for SportsEngine: a way to continue to build the sports tech scene they started, as well as a way for the company to keep an eye on potential partners and acquisition targets.
“We just want to be connected to the startups that are creating great new innovative projects,” said Carson Kipfer, cofounder of SportsEngine. “It’s exciting to be learning from them and to be seeing what they’re doing, but it’s also an opportunity for us to think about how they could possibly be a part of our company and what we’re doing.”
The need for a space
SportsEngine had been tinkering with the idea of creating a space to support sports tech startups even before the NBC Sports acquisition. A coworking space, as opposed to an in-house incubator or accelerator, allows them to connect and develop startups at any stage, which can help build community from the ground up, Kipfer said.
“We just wanted a physical space for the community,” he explained. “It’s one thing to say there’s a growing sports tech scene in the Twin Cities. But it's a completely [other] thing if members of the community feel that there’s a space that they can call home, that’s an epicenter of all these things that are going on. I think that’s an important ingredient to growing any community.”
The SportsEngine cofounders tapped Teke O’Reilly, who previously launched COCO (one of the first coworking spaces in Minneapolis, which now has five locations, including one in Chicago) as executive director. O’Reilly said he saw the need for niche coworking given, in his experience, sports aren’t always taken seriously by techies.
“When sports come up, the first thing that comes out of their mouth is 'sportsball!' and it’s an insult,” he said, of other tech communities. “I was looking forward to crossing into the nerd world where sports was celebrated, rather than looked down upon.”
The Pitch’s space certainly feels like the overlap of sports and tech. It has open workspace for drop-in members, dedicated desk space for more permanent members, and separate offices for several of its top tier startups. Within the larger office complex, a brewery and coffeeshop recently moved into an adjoining building. Decor skews athletic: There’s a defunct scoreboard on the wall, and an in-office basketball hoop for pick up games.
They offer the usual coworking amenities (free coffee, wifi, indoor bike parking, phone booths and conference rooms) as well as member-only workshops and networking. Membership ranges from $95 per month at the “fan” level for drop-in coworkers, up to the “Team” level, for startups working out of the space paying up to $299 per person per month, and the startups don't give up any stake in their company. They also have monthly sports tech meetups, open to the public.
Since launching in July, they have about 50 full time members and 25 part-time members, said O’Reilly. Startups working out of the space include Player's Health, an injury-management platform for youth sports; MyTeamGenius, which provides software for team tryouts and player evaluations; and MatBoss, a company that focuses on scoring and video capture for wrestling.
The growing community
SportsEngine, which employs approximately 250 out of their Northeast Minneapolis office, have spent the last eight years proving that a sports tech company can not only grow, but thrive in Minnesota. In addition to raising $39 million before being acquired by NBC Sports, they've recently acquired several smaller startups themselves, including RallyMe, a fundraising platform; TeamUnify, a startup that creates tech for swim teams; and Beyond the Scores, a startup creating tech for gymnastics organizations.
But they’re not the only ones making moves. Analytics company Sportradar, which has its US headquarters in Minneapolis, recently inked a deal to distribute statistics for the NBA, WNBA and D-League (they already have exclusive contracts with the NFL and NHL, and count Facebook, Google, Twitter and CBS Sports as clients, according to the Minneapolis Business Journal). SportsHub, a local fantasy sports startup and an anchor tenant at The Pitch, recently acquired Twin Cities startup LeagueSafe, an online payment system for fantasy sports, as well as the National Fantasy Championship assets of Chicago-based Stats. Minneanalytics, a Twin Cities big data community, is hosting a national conference on sports analytics this January. The Vikings recently announced they'll be hosting a tech accelerator in their new headquarters opening in Twin Cities's south suburbs in 2018.
Already the energy has started to attract startups from outside the Twin Cities: Player's Health moved from Chicago to Minneapolis last year in part due to the success they’ve seen here already.
“Minnesota youth sports provides great opportunity within the sports tech market and this was demonstrated by a successful SportsEngine business along with Fourcubed, a regulated gambling market [for gaming],” said Player's Health founder Tyrre Burks. “These businesses have consistently shown growth and opportunity within the sports tech scene that has influenced our venture north.”
They recently announced a partnership to integrate their tech with SportsEngine.
To get these startups to the next level, The Pitch will also provide connections to investors, major companies and local sports teams. O’Reilly is hoping to create a partnership with the Vikings tech incubator, and he’s in talks with the Timberwolves and Lynx to host a fan experience hackathon with members.
Jeff Hinck, general partner at Rally Ventures, the VC firm backing The Pitch, said while he’ll be keeping his eye on startups working out of The Pitch for potential investments, this could also help drive outside capital to the Twin Cities.
“There [aren’t] a lot of VCs here,” he said. “That’s one more reason for having a central location… it’s easier for out of town investors to look at opportunities if there’s a chance they can see five investments instead of one. They’re more likely to hop on a plane and give it a shot.”
The Minneapolis advantage
Sports and tech exist nationwide, so why would Minneapolis be the best place for a national sports tech hub? O’Reilly and Kipfer are bullish on the unique sports culture that exists in Minnesota, which starts in strong youth sports programs, extends to robust college programs, and reaches to the outer edges of the state (Warroad, Minn., population 1,781, located about 15 minutes from the Canadian border, routinely sends hockey players to the Olympics, for example).
“Athletics is written into the DNA of the entire state,” said O’Reilly. “Hardcore athletic development, all the way up to the Olympic development level, is something we do in the furthest reaches of our state, as well as all the metro area.”
“Anywhere you have the market at your fingertips, it's going to lead to a better product overall,” Kipfer added.
Sports aside, O'Reilly and Kipfer added that the growth of the Twin Cities startup scene (which has been gradually increasing in rankings of tech hubs around the country) can support additional startups, tech and ecosystems.
And while sports tech startups already in Minnesota see the opportunity in the Twin Cities, they hope that The Pitch will help show that potential to startups around the country.
“If we look toward the future in terms of what this becomes and grows into, is this movement that has a strong draw from across the country,” said Kipfer. “We’ve seen the community grow naturally here…We’d love it to be a destination for sports tech.”
Note: SportsEngine was previously named Sport Ngine, not SportsNgine. The piece has been updated to correct this.
