Nike has acquired TraceMe, the Seattle startup co-founded by Seahawks quarterback Russell Wilson and backed by investors including Amazon CEO Jeff Bezos, YouTube founder Chad Hurley, Alibaba co-founder Joe Tsai, and Seattle-based Madrona Venture Group.
Sources close to the deal confirmed the news to GeekWire.
Update: Nike confirmed the deal in a statement sent to GeekWire: “NIKE, Inc. has acquired TraceMe to supplement the company’s content strategy on Nike-owned platforms.”
Wilson tweeted GeekWire’s story with “Just Do It” — Nike’s famous slogan.
— Russell Wilson (@DangeRussWilson) October 11, 2019
TraceMe launched back in 2017, spinning out of Seattle startup studio Pioneer Square Labs. The company aimed to connect celebrities with “superfans” through its app via behind-the-scenes content, community features, and more.
But TraceMe pivoted late last year, laying off staff, shutting down its app, and closing a Los Angeles office as it shifted focus to a new idea called Tally, a sports prediction app. Wilson touted Tally during the Super Bowl in February and teams such as the L.A. Rams, Portland Trail Blazers, and St. Louis Blues used the app.
Nike was interested in the original TraceMe technology, sources told GeekWire. It’s unclear what will happen to Tally, or how Nike plans to use TraceMe.
The TraceMe team, which is less than 15 people, will join “Nike Seattle.” Several TraceMe employees, including CEO Jason LeeKeenan, changed their job titles on LinkedIn Friday. Leekeenan, co-founder of TraceMe and a former Hulu and Zulily executive, lists this on his profile:
Lead Nike’s Seattle office: a phenomenal group of digital product, design and engineering teammates, dedicated to building technology that supports Nike’s vision of making sport a daily habit.
Other TraceMe employees who now list Nike as their employer include senior software engineer Vlad Iacob; director of engineering Duoc Nguyen; director of product Trevin Chow; and director of digital product design Sophie Otto.
Nike COO Eric Sprunk, speaking at the 2015 GeekWire Summit, said that the company was interested in opening a Seattle-area engineering center. There are more than 130 engineering outposts set up by out-of-town companies in the Seattle region that are tapping into the rich technical talent base in the area.
LeeKeenan previously said TraceMe overestimated the addressable market for its original celebrity app. It was also not able to differentiate enough from Facebook, Instagram, Twitter, Snapchat, and other larger social media platforms.
There are several similar venture-backed sports media startups ranging from The Players’ Tribune, founded by MLB legend Derek Jeter, to Uninterrupted, founded by NBA superstar LeBron James. NFL quarterback Tom Brady and former lineman Michael Strahan raised VC money last year for Religion of Sports.
Nike’s digital push
While Nike originally started as a shoe and apparel maker, the Beaverton, Ore.-based corporation is becoming a tech company in many ways, investing heavily in tech and digital initiatives such as its “Consumer Direct Offense” strategy and its Nike App.
The company’s shares hit an all-time high last month, in part due to a stronger e-commerce arm. Nike’s digital business was up 42 percent in the most recent quarter, driven by mobile experiences, as the company saw overall revenue increase 7 percent to $10.7 billion.
The phrase “digital” was mentioned more than 40 times on the company’s earnings call last month.
“While products are usually the first to grab the attention of our consumers, we deepen those relationships through the power of digital,” Nike CEO Mark Parker said on the call. “To do that, we’re investing in three areas. We’re building industry-leading personal experiences, we’re quickly ramping up our back-end capabilities to capture more of that demand, and the final critical piece is to create scale through our own channels and with our partners.”
Nike also began selling products on Amazon in 2017. Parker last month said the partnership with Amazon “has gone well.”
Nike is focused on building out its NikePlus membership program that helps build 1-to-1 digital relationships with customers, and is rolling out a new subscription program for kids.
Nike in August bought Celect, a Boston-based predictive analytics company; last year it acquired Zodiac, a consumer data analytics startup; and in 2016 it bought Virgin Mega, a digital design studio. The company hasn’t made other tech startup acquisitions in recent years. (Update: Nike also bought Israel-based computer vision startup Invertex in 2018; hat tip CBInsights)
Nike in 2017 debuted an app called SNKRS, using augmented reality and a Pokemon Go-style scavenger hunt to rethink how customers find and buy limited edition shoes.