The Next Multi-Billion-Dollar Company In Sports

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Friends,

With technological innovation in sports continuously pushing the boundaries of what we know to be true, we’ve seen various leagues, individual teams, and athletes themselves consistently look for unconventional ways to improve their performance — investing millions of dollars in the process.

Here are a few examples:

• LeBron James spends $1.5 million annually on his body, including personal chefs, trainers, massage therapists, and the use of cryotherapy, hyperbaric chambers, compression products, and more.

• Russell Wilson says he spends “$1 million—if not more—annually” on recovery, which includes a full-time trainer, physical therapist, a “mobile person,” multiple hyperbaric chambers, and more.

• Tom Brady, after seeing the impact of fitness extend his career performance and longevity, launched a performance lifestyle brand called “TB12.” In just a few years, the company has expanded to three locations, has more than 60 employees and is doing millions of dollars in e-commerce sales globally.

As we continuously shift toward a society that is willing to push the boundaries of performance and recovery through innovation, and technology becomes further engrained in our daily lives, I firmly believe we are just entering a multi-year stage where rest and recovery technology is set to dominate the world of sports.

Today’s news only confirms and accelerates that trend.

What am I talking about?

The NFL has announced Hyperice, a global recovery and movement technology company specializing in vibration, percussion and thermal technology, as their “Official Recovery Technology Parter” — joining the NBA, MLB, PGA Tour, and UFC as Hyperice partners.

For those of you who aren’t aware, Hyperice offers a wide variety of technological tools including percussion massage guns, dynamic air compression boots, thermal/ice compression sleeves, and vibrating massage rollers.

Their goal is simple: to efficiently aid athletes, both professional and recreational, in their quest to rest, recover, prevent injury and perform at their best during athletic events.

The best part?

It’s working.

Almost a decade after CEO Anthony Katz created their first product, Hyperice announced a $47.8 million Series A round in October — which valued the company at $700 million.

Hyperice originally set out to raise $30 million, but given CNBC called it “one of the most high profile rounds in health tech,” they were massively oversubscribed — with a plethora of professional athletes, who are active users and ambassadors of the product, also investing in the brand.

Athlete investors include:

• Patrick Mahomes

• Naomi Osaka

• Christian McCaffrey

• Anthony Davis

• Chris Paul

• J.J. Watt

• Russell Westbrook

• Trae Young

• Rickie Fowler

• DeAndre Jordan

• Jarvis Landry

• Seth Curry

• Ja Morant

• Doc Rivers

• Ben Simmons

• Kelly Slater

• Fernando Tatís Jr

Even better?

Given it was Hyperice’s first time raising significant money, the economics of the business are fantastic.

Hyperice did about $100 million in revenue last year, project they’ll do “well over $200 million this year,” are “highly profitable,” plan to use the funding to expand their existing retail footprint both domestically & internationally, and firmly cemented their place in the race for a significant share of the $30 billion sports technology market.

A $700M company that’s barely raised any money, is profitable, and backed by the largest stars in sports?

Sign me up.

When it comes to the growth potential and long-term viability of Hyperice, which is currently valued at $700 million, I believe they have an opportunity to become a multi-billion-dollar company.

My thesis revolves around three factors:

1. Professional sports league and franchise investment

2. Retail consumer penetration & expansion

3. Potential integration of digital fitness products

Let’s run through them.

Professional Sports League & Franchise Investment

The opportunity for Hyperice to build a significant presence throughout major professional sports leagues and their affiliated teams is not exactly new — they’ve already done it.

As I mentioned before, Hyperice has inked partnerships with essentially every major professional sports league in the US—from the NFL to the NBA—which will see their products used before, during, and after games. The PGA TOUR even re-wrote their rulebook to allow golfers to use Hyperice products on the course.

As professional sports leagues continue to bring in billions of dollars annually through broadcast deals with ratings that are contingent on the biggest stars in sports participating, you can guarantee they’ll be willing to spend pennies on the dollar to protect their investment through appropriate recovery technology.

Don’t believe me?

Get this — as part of the NBA’s partnership with Hyperice, they will be providing players with a Hyperice percussion massage gun underneath each chair throughout every arena in the NBA.

With a slew of athlete investors who are active ambassadors and users of Hyperice technology, the various sports leagues and their respective teams have no choice but to commit financially.

An athletes ability to compete at the highest level is important to leagues, teams, and individual players. By aligning interests and creating a win-win scenario, Hyperice comes out on top.

Retail Consumer Penetration & Expansion

Here’s a shocking statement: Hyperice didn’t become a $700M company overnight.

The California-based performance technology recovery company spent years developing their products to the required specifications of a professional athlete, battle-testing it for approval, and then worked backwards toward retail market adoption.

Now, it’s time for that investment to pay off.

The best part?

They’ve already built the required infrastructure for sales to explode.

Not only does Hyperice have a proven product that markets itself through it’s tangible connection to professional sports leagues and players, but they have inherent distribution through the audience of their 25+ athlete investors, and with $48M in new funding — they now have the capital required to fund inventory, pay marketing expenses, and start expanding globally.

With $200 million in annual sales, Hyperice has already seen success through a broad based retail approach. As they continue to expand both domestically and internationally, and consumers of the future care more about their health and wellness by the day, that number will only go up.

Potential Digital Fitness Integration

While today’s fitness ecosystem includes various components like digital fitness products, quantitative health and wellness tracking applications, and recovery technology like percussion massage guns and dynamic air compression boots — the consumer fitness infrastructure of the future will almost certainly integrate these products.

What do I mean?

Think Peloton, Whoop and Hyperice combined.

There’s no indication Hyperice wants to become or participate in that, and perhaps it’s a pipe-dream anyways, but whichever company is able to get it right will win.

And for those of you who still don’t think a technology-based recovery company can be worth $2 billion or more as a stand-alone business — think about this.

Jerry Mays and Len Dawson of the Kansas City Chiefs were drinking soda and smoking cigarettes during halftime of Super Bowl I, while it’s now completely normal for an athlete to sleep in a $250,000 hyperbaric chamber.

Like I said, times have changed.

In the end, as technological innovation continues to occur and humans demand a more scientific and analytical approach to their overall health and wellness, this trend will only accelerate.

Hyperice is at the forefront of recovery technology, and with an additional $48M of capital and a slew of influential athlete investors, it will be fun to see how they build their multi-billion-dollar business.

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