Subscribe to JohnWallStreet

March 20, 2023

Correction

: In last Thursday's newsletter we listed Sapphire Ventures among the sports-centric VCs that custodied assets at SVB. Sapphire Ventures, the growth fund, does not invest in sports. Sapphire Sport, the VC we were speaking of, has roughly $300 million in assets under management, but just a small fraction of cash at the troubled bank; less than $1M in over four accounts.

Jump Raises $20 Million to Build Shopify for Sports Teams, Venues

Jump, a ticketing and fan-experience focused startup founded by Alex Rodriguez, Marc Lore and CEO Jordy Leiser, recently raised $20 million in seed funding. Forerunner Ventures led the round. Courtside Ventures, Will Ventures, Mastry Ventures, MetaLab and Drive by DraftKings also participated.

Jump strives to help sports teams and event venues address a widely accepted –but difficult to solve– pain point. “Operators do not understand who is coming into their stadiums,” Brian Reilly (managing partner, Will Ventures) said.

And because teams and event venues are operating without that data, they are unable to deliver the personalized experience fans have come to expect.

They've also been unable to evolve into modern direct-to-consumer businesses.

“If you talked to any [front office] executive or team owner, they would tell you there is surplus value everywhere [within a pro sports organization] and that if they only had access to better and more modern technology [they could capture it],” Leiser said.

So, the venture-backed startup is working to build a centralized platform through which ticketing, commerce experiences and team correspondence can all flow.

Think of it as Shopify for sports teams and venues.

Historically speaking, sports teams and venue owners have struggled to identify exactly who was at a given event. Fans buy seats from a multitude of primary and secondary ticketing vendors, and few of their platforms tie back to teams’ mobile apps (or anything else organizations use to connect directly with their fans).

The same could be said about the various e-commerce and fan experience channels fans use.

Because each of those fan touch points are siloed and teams don't have access to the data, they struggle to deliver the personalized experience fans have come to expect.

“When you open up the team app or when you go to a game, before during and after, it [should] feel as if it were custom tailored for you,” Leiser said. “That’s what happens when you go to Amazon.com.”

Unfortunately, attending a sporting event often feels transactional right now.

It is not possible for teams to plug into many of these siloed platforms because they run on outdated legacy technology. “The biggest ticketing and event software companies have been around for decades,” Reilly said, “and the new big players in the space who have acquired scale, have built good front-ends for consumers, but acquired antiquated [back-end] technology [to power it].”

The disjoined data problem also prevents sports teams from functioning as modern D2C businesses.

“All of that targeting and cross-selling, all of the traditional e-commerce motions, have not been enabled,” Reilly said. “But that’s why we see so much upside.”

Jump is building a product that caters to teams and venue owners. It is promising to deliver ticketing data transparency that will enable operators to understand who their fans are and who is attending games.

That information should open the door to new revenue opportunities. “Whether it is through [the sale of] bundles and better inventory management through the back-end, or cross-selling to other sporting good items,” Reilly said (think: merchandise, collectibles).

It should also improve relationships between fans and their favorite teams.  

“What Jordy wanted to solve was how [teams] engage with superfans," Reilly said. "How do [they] reward them for being superfans and create this incredible end-to-end fan-first experience.” 

To be clear, Jump is not trying to build the next Fanatics or Collectors. The company is focused on rethinking the primary ticketing function and will work with others by “serving as an integration point, like Shopify does, for various other software vendors to plug into” Reilly said. 

Jump was in stealth mode up until it announced the recent round. The company made the decision to come out now, even though the first version of its product remains a couple of quarters from launch, for two reasons.

“We’re scaling the team quickly, so we need to hire the best possible people that we can, and we want to be able to tell [the company] story out loud in public,” Leiser said.

“The second thing is we want to continue to learn from people in the industry, people who have been thinking about [the ticketing and fan experience] problem for a long time,” Leiser added.

Industry insiders have been thinking about the problem for a long time, at least on the ticketing end, because the establishment has largely been entrenched for decades. Existing relationships, which teams and venues fear ending due to potential economic ramifications (think: loss of other events), and long sales cycles have made it difficult for new entrants to break through.

But Jump believes a differentiated business model can upset the status quo and that the company simply needs the opportunity to showcase its value proposition.  

Between Rodriguez, Lore and Jump’s other well-connected investors, Jump should be able to get a foot in the door at a pro sports organization or two and get case studies going. Remember, Rodriguez and Lore own the Minnesota Timberwolves.

If Jump can show a club(s) successfully leveraging the platform to own more of the fan ecosystem and deliver an improved fan experience, others will follow.

While the data and new revenue opportunities are expected to speak to rights owners, Jump hopes to drive awareness of and consumer adoption for its platform with a marketplace that empowers fans to upgrade –or jump– their seats during a game.

“You see all these seats that are open in the lower bowl of the stadium,” Reilly said. “Why not make them available in a live market during the [event].”

Jump has raised $30 million in total to date. The company is not done fundraising. However, how much and exactly when it will raise more money remains unclear.

It will largely be a function of how quickly Lesier and Co. can build the product and get to market.