US sports equipment retailer Dick’s Sporting Goods has become one of the few sports retailers to enter the corporate venture capital world, forming a $50m investment arm called DSG Ventures to back early-stage sports technology startups.
In addition to its funding activities, DSG Ventures is partnering innovation consultancy VentureFuel on a pilot scheme where early-stage companies will work with the unit on technologies such as artificial intelligence or e-commerce that can make the customer experience better.
The worldwide sporting industry was valued at $355bn as of 2021 according to Research and Markets. Although retailers have dipped a toe into the corporate venture space, none have been frequent investors.
Adidas launched Hydra Ventures in 2011 but its last deal was three years ago. Foot Locker invested in several companies in 2018 and 2019 but has since pivoted to backing VC funds, while Nike’s startup deals have been few and far between.
DSG Ventures will supply funding for startups focusing on athletes and their communities, up to series B stage. It is targeting the ‘future of sport and retail’ in addition to services or products that can boost access to sports, diversity and inclusion.
Ed Stack, chairman of Dick’s Sporting Goods, said in a release: “Dick’s would not be what it is today without the support we received along the way from others who saw our company’s potential.
“Now DSG Ventures will enable us to give back and help support entrepreneurs achieve their dreams through our connections, experience and support. We know that DSG Ventures (and our partners) will bring innovative products, services and experiences to athletes around the world.”
The fund will offer access to its parent company’s retail experience and relationships with athletes as well as a distribution network stretching across 850 stores, including those of subsidiaries Golf Galaxy, Field & Stream and Public Lands.
The unit launched with four portfolio companies: women’s basketball footwear brand Moolah Kicks, online sporting goods marketplace SidelineSwap, youth sports promoter EL1 Sports and Out&Back Outdoors, which sells second-hand outdoor apparel online. It also provided capital for Courtside Ventures, a VC firm focusing on sports, fitness, digital media and gaming.
Natalie White, Moolah Kicks’ founder and chief executive, said in a release: “The investment by Dick’s Sporting Goods, coupled with our distribution partnership, has propelled the Moolah Kicks brand from a basketball startup to a category pioneer with a national footprint.
“We could not be more encouraged by Dick’s Sporting Goods’ continued commitment to providing performance products specifically for female athletes.”
