A Colorado-based company that operates dozens of business accelerators worldwide plans to start its first sports-technology accelerator in Indianapolis with the close participation of local sports groups and pro teams.
The program, announced Tuesday afternoon, involves five local sports organizations, with Indiana Sports Corp., Pacers Sports & Entertainment and the NCAA joining the state’s Next Level Indiana Trust Fund as founding partners.
However, when asked by IBJ, state officials refused to specify how much the Next Level Fund—a new state-backed venture pool with $250 million to invest—was contributing to the program. And Gov. Eric Holcomb declined to answer questions about the specifics of the program's financing.
The Indianapolis Colts and Indianapolis Motor Speedway are supporting partners. Boulder-based Techstars will run the program.
Under the three-year program, 10 startups will be selected annually to relocate to Indianapolis for three months to receive mentoring from entrepreneurs and industry experts. Officials said they have not determined where the accelerator and companies will be housed locally.
The local partners are expected to benefit from early identification of key trends and companies in sports technology, as well as embracing technology and business models that will impact the sports industry. The accelerator is set to invest a total of $3.6 million directly into the companies over three years.
“Indiana Sports Corp and its partners are proud to bring the first sports tech accelerator of its kind to Indianapolis,” said Indiana Sports Corp. President Ryan Vaughn in a media release. “We are excited to match with the most talented entrepreneurs in the world to foster innovation and expand our city’s footprint in the sports and tech industries.”
The three-year local program will be called the Techstars SportsTech Accelerator Powered by Indy. It will launch in May 2019 at the Indianapolis 500, when the first 10 participants will be announced.
Vaughn and High Alpha co-founder Scott Dorsey brokered the deal with Techstars. The Next Level Fund announced an investment in High Alpha earlier this year, in addition to an investment in the Foundry Group, based in Boulder, Colo.
Founded in 2006, Techstars has 46 mentorship-driven accelerator programs in operation. The company says it has a worldwide network of 10,000-plus business founders, partners, mentors and investors.
Techstars' accelerator portfolio includes more than 1,400 companies with a market cap of $16 billion. It operates accelerators for various specialties with several major companies and not-for-profits, including Amazon, the Nature Conservancy, MetLife and Target.
Techstars has graduated such companies as PillPack, which Amazon acquired for roughly $1 billion, and robotic-toy firm Sphero, which created the BB-8 droid character featured in two "Star Wars" films.
Participants aren’t required to stay in their accelerator locations after completing their programs, but many of them do because of the connections they develop over the three months, according to Techstars.
Local organizers did not say how much would be invested in the sports-tech program or how much funding each startup participant could receive. The role of the Next Level Fund was unclear, and state officials refused to reveal how much the fund is contributing to the program when asked by IBJ.
On its website, Techstars says its accelerator companies are offered a $100,000 convertible note. Techstars also provides an additional $20,000 for participants to use as a stipend to support living expenses during the program. In return, Techstars and its partner organizations will receive a 6 percent ownership stake in the company.
Techstars says it also provides startups in the program more than $1 million in additional benefits, including legal help and lifetime membership in its network of entrepreneurial experts.
At the end of the program, startup founders will have the chance to pitch their businesses to angel investors and venture capitalists.
Participants in Techstars accelerators typically raise more than $2 million in funding, on average, after completing the program.
Techstars will choose a managing director to oversee the program and hire support program staff. The local team and Techstars will recruit and choose startup participants in the following business areas: fan participation, player/driver safety, ticketing, merchandising, athlete performance management, and athlete wellness, among others.
Applications for the first round of the program will be taken beginning in December.
“We are excited to invest in this new partnership that will serve as a growth engine for entrepreneurship, technology and innovation in our local economy,” said Stephen Simon, co-owner of Pacers Sports & Entertainment, in a media release. “We are constantly looking for new ways to leverage technology to improve our operations as well as our guest and fan experiences, so it’s great to work in a city that is emerging as the premier sports-tech hub in the world.”
The program will be the second for Techstars in Indiana. Last week, the Indianapolis-based Heritage Group announced it was teaming with TechStars to bring materials science-based startups to Indianapolis through a similar venture.
The accelerator, to be called the Heritage Group Accelerator powered by Techstars, will be housed in 50,000 square feet at Heritage Group’s corporate research and innovation facility at Intech Park off of West 71st Street and Interstate 465.
“Techstars is proud to open our second accelerator in Indy,” said David Brown, co-CEO and founder of Techstars, in the media release. “Indianapolis is growing international recognition for its investments in innovation. The entrepreneurs in the Techstars SportsTech Accelerator Powered by Indy will have access to incredible leaders from Indiana Sports Corp. and all of the sports leaders in the area.”