SponsorUnited, a sponsorship information platform, recently closed on a $35 million Series A round led by Spectrum Equity. owner of the milwaukee bucks marc lasry and San Diego Padres co-owner Ron Fowler have also invested in the company. The money raised will be spent on data automation, talent recruitment, and technology development (think: a more personalized user interface).
Spectrum Equity estimates that brands spent $25 billion on sports sponsorships at North American properties in 2021. With so much money at stake, there is a growing desire among stakeholders for insights that can help in the decision-making process. .
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“The [SponsorUnited] The platform has become a go-to resource for everything from competitive analysis, best practices and asset audits to deep-dive custom research on specific strategic questions we need to explore,” said Justin Toman, PepsiCo Sports Marketing Director. “It has given us a much more holistic picture of the sponsorship landscape, which in turn has allowed us to make more informed and efficient decisions when it comes to our sports investments and how we structure our partnerships.”
Investors are betting on the continued growth of the category and SponsorUnited’s ability to become the dominant player within the vertical. The value creation opportunity is tremendous if the company can successfully establish itself as “the only source of truthful information on sponsorship market intelligence,” said Chris Mitchell, CEO of Spectrum Equity. Holding partner Definitive Healthcare Corp., other information industry investment, has a market capitalization of $1.3 billion. SponsorUnited has said it raised its Series A round to north of $100 million.
JWS socket: Sports sponsorship has long been a multi-billion dollar category, but until 2018, when SponsorUnited was launched, there was no central source of information on the entrants. “If you were a property or rights holder and you wanted to know what others in the ecosystem were doing, there was nowhere to go,” Mitchell said.
The multitude of channels and formats on which sponsorship ads are served made it difficult for brands to compete with one another and for intellectual property holders to maximize the value of their assets. Few companies have the internal resources necessary to collect and synthesize all available information.
SponsorUnited’s platform has consolidated the fragmented landscape of market intelligence. The company’s online portal has information on 1.1 million sponsorships and media partnerships across 250,000 brands and properties. “It’s a bit like the Bloomberg Terminal for marketing partnerships in that we have all the data in one place,” said Bob Lynch (Founder and CEO of SponsorUnited).
The platform enables sports organizations to make better and more informed decisions. It also allows them to use staff more efficiently. “About 20% of a team’s time can be spent on research and reporting,” Lynch said.
Rights holders rely on the SponsorUnited platform to grow their sponsorship business as well. “It has become quite common for our clients to tell us that they have secured six and seven figure deals as a result of not only discovering partners on our platform, but also trusting our data throughout the process from pre-launch, ideation, close of performance measurement,” Lynch said.
SponsorUnited is not trying to replace traditional advertising agencies. “If you’re doing a stadium naming rights deal, you’re still going to be working with the most reputable agencies in the world,” Mitchell said. “But [the platform] It is very valuable as a source of information that can complement this activity”.
Anticipated growth in sports sponsorship spending and increasing demand for data and analytics are strong macro tailwinds. “The more brands are closing deals and the more properties are monetizing their assets, the better it is for industry awareness and the number of users will only increase,” Mitchell said.
SponsorUnited currently has 2,900 brands and intellectual property owners in 25 countries using the platform. The proven fit of the product to the market was one of the factors that convinced Spectrum Equity to back the company.
The growth equity firm was also impressed with SponsorUnited’s ability to fuel its path to a leading position in the market. “Efficiency of capital is a good leading indicator of what we think is a fundamentally attractive corporate economy,” Mitchell said.
Spectrum Equity has long been successful by investing in data or information services businesses, albeit in other industry verticals. In addition to Definitive Healthcare (health care), Ancestry.com (genealogy) and World Check (banking) are among the company’s current and former portfolio companies.
However, the value proposition has changed over time. The old business model was “to get proprietary access to data and then charge aggressively for people to consume it,” Mitchell said (think: Kelley Blue Book). But when the proliferation of the Internet made much of that information free, data companies added analytics, according to Mitchell.
Because much of the information that appears on the SponsorUnited platform is publicly available, such as the names and contact information of sponsoring executives, it might be assumed that the barrier to competition is low. But the vast amount of data collected, ingested and normalized over the past five years, and the volume of customer relationships established, creates a significant moat around the business. “When [Lynch] goes to a meeting and says he has all 30 NBA teams [as clients]that makes their job so much easier,” Lasry said.
It also creates a powerful forward flyer effect. “If you buy SponsorUnited because it is the most comprehensive database available, then [the company] get more customers and even more [sales] activity,” Mitchell said.
Having access to intelligence from SponsorUnited has helped the Bucks grow their sponsorship business. Lasry declined to say exactly how many more sponsors he has signed up or how much more revenue the franchise has earned. However, she said the information from her has been “worth multiples” of what the club has paid for her.
Depending on the scope of the organization and the size of the team, access ranges from low five figures to low six figures.
There are numerous industry-leading information companies, built on open source data, worth over a billion dollars in other verticals. While Mitchell was hesitant to make any predictions about how valuable SponsorUnited could become, he sees a similar opportunity in the sports sponsorship segment. “We’ve seen that with so many companies, there are often one or two sources of information in the verticals that become large market share players.”
Given that the company already has nearly all of the major professional sports rights holders as clients, it’s fair to wonder where future growth will come from. Mitchell said there is “a long way to go” to get more current participants to use the platform. “The brand market is [also] very big and [SponsorUnited] it has low penetration today.”
Mitchell believes the company will also have pricing power as it continues to establish itself as a market leader, and that it can charge customers more by offering deeper proprietary intelligence.
Most of the business-specific information currently in the database is qualitative in nature. “Who is advertising, where are they advertising and how often, and what assets are the owners monetizing,” Mitchell said. “But the terms of the deals is an area where they are starting to move.”
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