Catapult launches AU$100m equity raising to target wider sports market

On the back of two acquisitions on Wednesday that totalled over AU$80 million, Australian athlete analytics specialist Catapult is looking to target the "prosumer" market to ensure positive earnings by the next financial year.

Melbourne-based sports analytics firm Catapult has launched an AU$100 million equity raising to fund two acquisitions, which it said will help tap a lucrative market that includes schools and colleges.

The funding, which is fully underwritten by Goldman Sachs, follows deals announced on Wednesday with US-based video analysis specialist XOS Technologies for AU$78.7 million, and a further AU$4.8 million for Ireland's wearable tech firm Playertek.

The company already supplies its performance-tracking wearable to clients including English Premier League champions Leicester City, as well as the NBA's Golden State Warriors, and the NRL's Cowboys. But executive chairman Adir Shiffman believes there is great potential beyond the world's sporting superpowers.

"We've got the majority of NFL teams, the majority of NBA teams, and a large and very rapidly growing number of college teams: all of that spreads word of mouth pretty rapidly and the fact that our clients tend to end up winning championships year after year also doesn't hurt," he said.

Shiffman believes that the prosumer market is at least 10 times bigger than the elite category Catapult already dominates, and with its two recent acquisitions, the company plans to commercialise a cheaper version of its premium product to tap into this market.

"We're not specifically speaking about individuals that might go into a store and buy some hardware or a solution for themselves: it tends to be a team, be that amateur teams or lower league teams," Shiffman said.

"That is the next market we see as ripe for this technology. We see this market being at least 10 times the size of the elite market."

Catapult listed on the ASX in December 2014. Since that year its share price rose from 55 cents to currently stand at AU$3.80, giving a market capitalisation of AU$194 million.

Recent figures for the company showed a first half loss of AU$2.6 million on revenue of AU$7.8 million, and the XOS acquisition is expected to deliver AU$27 million in percentage return and help Catapult's earnings become positive by the 2016-17 financial year.

Since Catapult's foundation in 2006, it has worked with the Cooperative Research Centres (CRC) to commercialise the GPS trackers, and deployed integrated ball tracking, multi-player wireless links in real-time, an indoor GPS system, and an athlete analytics platform.

Catapult's GPS tracker allows coaches an in-depth look at their athletes' biometric data, and uses the information in real-time to set targets for a training session. It also maps patterns that have led to player injuries, helping them avoid these certain routines in training for the future.

The Brazilian Football Confederation, which signed Catapult as its technology partner in July 2015, said that devices previously used in training had only taken into account distances travelled. With the addition of information such as speed, deceleration, and acceleration, physiologists are able to track players' displacement in training, and create algorithms. The result of is a training situation can be made to more closely resemble a match.

The Catapult platform also uses a cloud system to upload each player's data profile to the cloud, accessible at any competition around the world.

Other elite clients of the company include EPL clubs Chelsea, Tottenham Hotspur, and West Ham United, as well as Champions League winners Real Madrid. It also supplies its solutions to cricket, rowing, and basketball teams, as well as research centres.

Analyst firm Gartner earlier this year predicted that by 2018, more than half of large organisations will compete using advanced analytics and proprietary algorithms. The company's SVP Peter Sondergaard also believes that big data is useless without algorithms.

"Products and services will be defined by the sophistication of their algorithms and services. Organisations will be valued, not just on their big data, but the algorithms that turn that data into actions, and ultimately impact customers," Sondergaard said.

"Data is inherently dumb. It doesn't do anything unless you know how to use it, how to act on it, because algorithms is where the real value lies. Algorithms define action," he added.

Gartner also recently revealed that sports teams are increasingly embracing ICT, not just for performance assessment, but in enhancing its relationship with fans, improving venue automation, and utilising devices and software to help officiating. This includes smaller teams that are on limited resources and are turning to tech for innovative management techniques.

Hours of preparation for next month's Olympic Games in Rio involving stimulating real events at real venues in a variety of scenarios was completed last month. Technology supplier Atos said Rio will be the first Summer Olympics to use the cloud for key applications, including the volunteer portal and the accreditation system.

Real-time player data also played a key part of this year's Wimbledon Championships, one of the four grand slam tennis tournaments that implements IBM's event management system.

With AAP