P.E. Roundup: Mars Reel, Sparta Science and Barstool Sports Close on Funding Rounds

Mars REel

While JohnWallStreet focuses on publicly traded companies, there have been several noteworthy sports-related private-equity deals announced in January; Mars Reel, Sparta Science and Barstool Sports have all raised capital to grow their businesses. Below is a summary of each transaction:

Mars Reel, a sports streaming company that posts video highlights (i.e. dunks) of high school athletes on various social media platforms to draw the eyes of talent scouts, raised a $2.7 million round from a series of investors including LeBron James, Kevin Durant, Shane Battier and the rapper NAS. The company, which also has a player-driven diary series and links to individual player websites, received 148 million unique views in 2017 and is credited with raising the awareness of Spartanburg Day School star Zion Williamson (committed to Duke).

Sparta Science, a sports-tech company that uses data and technology to measure and reduce player injury risk and maximize performance, has raised a $7 million Series A round. The investment, led by Playground Global, will be used to further software innovation and grow its team; efforts that will enable the company to expand beyond the sports world and into the Clinical space. The software, currently used for injury prediction and rehabilitation, is used by various pro & college athletic teams including the Cavs, Falcons, 49ers, Rockies, Nationals, UT, KU, RU and AU.

Barstool Sports, a “controversial” sports and lifestyle digital media company, has raised $15 million at a $100 million valuation. The investment comes from the Chernin Group, who had purchased 51% of the company in January 2016 for $10 million. The company intends on using the capital to double its staff (to 160), expand its amateur-boxing promotion and to create new properties; including a line of branded alcohol and a Barstool themed bar. Barstools also announced it would also begin to sell subscriptions to fans who seek exclusive content.

Howie Long-Short: Sparta Science had raised just a $2.7 million seed round prior to closing on their Series A round, so there aren’t a ton of ways to play the company; but Qualcomm Ventures, the investment arm of Qualcomm, Inc. (QCOM) participated in the seed round. There are no publicly traded corporate backers invested in Mars Reel or Barstool Sports.

Fan Marino: In a recent Recode Media podcast, Bleacher Report CEO Dave Finocchio was asked his thoughts on Barstool. Finocchio answered the question fairly, pointing out their particularly loyal fan base and offering complimentary words for Barstool CEO Erika Nardini. The interview made headlines though, for a quote pointing out the obvious; “they’re not politically correct. They’re definitely more, it feels to me like, white males who want to join a country club. They’re never going to be as big as we are because we work very hard to be inclusive and we don’t offend people.” Naturally the Stoolies disputed the allegations (the comments are fairly entertaining), but the fact remains they’re untouchable from a corporate advertising standpoint. Peter Chernin sits on the boards of American Express, Twitter and Pandora, but those brands won’t advertise with Barstool; their target clientele includes women. Barstool can sell a ton of merchandise, offer subscription fees and draw crowds at events; but, they’ll never draw an audience the size B/R does.

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Author: John Wall Street

At the intersection of sports & finance.

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