Nike has purchased a tech startup called TraceMe — a platform aimed at sports teams, broadcasters and venues — to help fans engage around sporting events and to expand its digital media business.
Nike is widely popular as a premium sneaker seller, however, with the increasing competition and advent of the ever-evolving age of technology, the sneaker company is opting to evolve along with it and is planning to try to break through the digital media arena.
TraceMe, before it is known now, was originally built as an app to let fans engage with sports stars and other celebrities called Tally. Tally was originally founded by Russell Wilson, the champion quarterback of the Seattle Seahawks, who was the executive chairman of the startup.
The company had raised at least $9 million from investors that included the Seattle-based Madrona Venture Group and Bezos Expeditions (Amazon CEO Jeff Bezos’ fund), as well as YouTube co-founder Chad Hurley and others, and it was last valued, in 2017, at $60 million.
Nike confirmed the acquisition to an outlet in a short statement: “NIKE, Inc. has acquired TraceMe to supplement the company’s content strategy on Nike-owned platforms,” a spokesperson said in an email.
Now, at least eight of TraceMe’s original team, including CEO Jason LeeKeenan, an ex-Hulu executive, are now listing Nike as their place of employment. LeeKeenan describes his new role as the head of Nike Seattle. Others on the team now have taken roles that include software engineers, head of product and product designers.
The acquisition is a likely move for the company as it has well established its brand along with famous sports stars, celebrities, music personalities, as well as other brands. I thas also opened its collaboration doors among other fashion labels and street style brands that have included the likes of Supreme, Travis Scott, and the like of Michael Jordan.
Setting up an independent media platform will largely help the brand leverage its collaborations and endorsements that it already has in place into experiences beyond shoes, advertising, and athletic performance.
Aside from TraceMe, Nike has also purchased other tech startups in hopes of taking advantage of technology to improve its performance. In August, Nike acquired Celect, an AI-driven startup that manages retail analytics to further strengthen the growing Consumer Direct Offense plan of the sneaker company.
Other purchases include Zodiac, a consumer data analytics company. In April, Nike also acquired a computer-vision company, Invertex, which was ultimately behind the recent rollout of Nike Fit — a new 3D scanning feature within Nike’s mobile app that’s able to predict what size shoes people should buy accurately.
Doing so has made Nike reaping the benefits. Sales from Nike’s Direct business rose 12% on a currency-neutral basis to $10.4 billion in fiscal 2018 from $9.1 billion in fiscal 2017, according to SEC filings. Direct revenue now makes up about 30% of total Nike brand revenue, the company said, fueled by online growth.
Nike shares are up about 8% year to date, bringing the company’s market cap to $127 billion.