Is WHOOP's Financing Another Signal Of The Rebirth of Wearables?
WHOOP's new $25 million C round will capture the attention of hopeful hardware vendors and investors from across the sports tech market. We know a number of them. In fact, a number of Sports Innovation Lab friends are involved in the WHOOP deal and many others in our network have considered working with the company. WHOOP is clearly the wearable leader in driving marketing and distribution deals in the professional sports space.
Our take: We've been bullish on the next wave of wearables changing athlete performance and even moving into adjacent markets like health care. We follow this "Quantified Athlete" trend closely, but we define it much more broadly than wearable devices. However, we remain skeptical that form factors that focus on wrist worn devices will have a meaningful impact or staying power in the market.
The data WHOOP collects comes from the wrist and that has its own challenges when it comes to accuracy and consistency. Environmental factors, motion artifacts, and simple user behavior (like wearing the device in a different location) can alter data. But more importantly, professional athlete data (what WHOOP collects) is exactly the athlete performance and biometric data leagues and players associations are gearing up to battle over. Who owns what data? On field data? Sleep data? Training data? And where and when this data can be used.
Some in the industry point to early broad legal agreements as laying a foundation for these rights, but the reality is this is all up for future negotiation. We expect each league and country to make a mess of this regulation slowing the recognition of economic value of this data. After researching this space, the clearest financial use case for this data is also the most controversial: prop betting on live sports. We're a long way from that in the U.S. where WHOOP has locked up most of its professional sport marketing deals.
Header Image source: WHOOP
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