Krossover founder Vasu Kulkarni
Even on the morning his company was acquired by Dallas-based sports management provider Blue Star Sports, Vasu Kulkarni still wasn’t sure if the deal was going to close.
“They’re private equity guys, and we’re still a startup. Usually, those things don’t go together,” said Kulkarni, the founder of sports film analysis and statistics startup Krossover.
“I tell people we turned water into wine over here…The sports tech space is a rough, rough space to build a business in, especially this amateur space. While there’s a massive market, it’s so fragmented. We’ve been at it for a long time. We’ve only recently got into eight figure revenues (annually). I feel like we executed the hell out of this business and made it a success.”
With the purchase, Krossover became Blue Star’s No. 11 acquisition while days later the company acquired its 12th business in sports event, marketing and media entity Student Sports. Kulkarni remarked that the acquisition wasn’t a “massive blockbuster deal” by any stretch but still “a nice win” for the company. Terms of both deals weren’t disclosed.
Added Rob Wechsler, Founder and Chief Executive Officer of Blue Star Sports in a statement: “The addition of Vasu to Blue Star Sports bolsters what was already the strongest line-up of leaders in the sports technology space. Krossover adds yet another powerful layer to the portfolio. Blue Star Sports is with you from your very first rec. league all the way to the high school, collegiate and professional ranks. Our technology is used by tens of millions of people, all over the planet. The depth and breadth of the product we now offer is unrivaled by anyone in the industry.”
Kulkarni said he was “intrigued” when he first heard about Blue Star Sports 18 months ago after its announcement of raising $100 million.
“When they originally kicked off, it was big news that an unknown company called Blue Star Sports had raised…that kind of dough, and I’ve never even heard their name,” he said.
“I remember thinking, ‘I don’t know what these guys are doing. They don’t have a product. They’re basically a holding company. I can’t quite understand if they’re planning to build something or just going to buy.’ I didn’t have any idea of what they were trying to do. They had a $100 million bucks, and I thought that was pretty damn cool.”
Following an introduction, the two parties stayed in touch over the 18 months, attended a few basketball games together and Kulkarni flew to Dallas for an in-person meeting. The way Kulkarni explained the relationship, there wasn’t a clear agenda or plan for how both sides could potentially work together in the future. If anything, it was more of an ongoing open conversation.
According to Kulkarni, Blue Star made an offer earlier this year and described how Krossover would integrate into the larger Blue Star organization, which received its own injection of capital in April from middle-market firm Genstar Capital.
“Blue Star said, ‘Hey, your product would fit really well within the ecosystem of everything that we’re trying to do. We’re being very aggressive on acquisitions…We think what you’re doing is really interesting. You’re the only ones doing it in the space. And, if you join us, we think we can grow this business a lot faster and help drive revenue for all of our other businesses,’” Kulkarni explained.
To date, Krossover has raised roughly $24 million and still hasn’t reached profitability, according to Kulkarni, but said that the startup was “probably” heading towards being profitable on its own in 2018.
The acquisition serves a two-fold purpose. First, Krossover can tap into the relationships already forged by Blue Star with larger organization like AAU, USA Football and USA Soccer, some of which have been tough to crack for the startup. As a result, instead of establishing partnerships on an individual customer basis, which Krossover has been doing since its founding in 2009, it can “piggyback on all of those relationships (Blue Star) has,” as Kulkarni explained.
“For us, I’m looking at this as a way to accelerate growth,” he added.
Said Kulkarni: “Most importantly, we’re not selling our company to someone who is going to shut it down. For me personally, I want this to be a company that is alive 30 years from now. If I ever have kids and hopefully they’re going to play ball, when they’re in high school, I want them to be able to use Krossover. I want to be able to say that I built the company, and I didn’t want it to go into the hands of someone who was just going to shut it down, grab our customers and move them over to another platform and no one will remember five years from now that Krossover ever existed.
“We built a helluva team, helluva company, helluva brand and for me, it was more important to know that that was going to live on or at least have a hope of living on rather than just someone shutting it down.”
