Dick’s Sporting Goods launches ventures fund

Discussion
Photo: Getty Images/Miosotis Jade
Nov 07, 2022

Joining a number of other retailers with in-house investment vehicles, Dick’s Sporting Goods announced the launch of DSG Ventures, a $50 million fund that will initially focus on companies that directly serve athletes and their communities, or that help Dick’s better serve its customers.

The investment stage focus is on pre-seed, seed and series A/B rounds. In many cases, Dick’s expects to provide support beyond capital, such as help with distribution reach, retail expertise, operational disciplines and customer relationships.

DSG Ventures’ initial investments include:

  • Moolah Kicks, the first and only footwear brand focused exclusively on women’s basketball;
  • SidelineSwap, a resale marketplace focused on sporting goods; 
  • Out&Back Outdoor, a resale marketplace focused in outdoor gear;
  • EL1 Sports, a youth sports training company that currently operates nine indoor training facilities, including three Los Angeles Dodgers academies;
  • Courtside Ventures, a venture fund focused on early stage sports, collectibles, fitness and gaming companies.

The investment hub is also working with New York City-based marketing company VentureFuel Inc. to identify startups that could collaborate with the retailer around e-commerce, the in-store experience or AI.

“Dick’s would not be what it is today without the support we received along the way from others who saw our company’s potential,” said Ed Stack, Dick’s executive chairman and the founder’s son, in a statement. “Now DSG Ventures will enable us to give back and help support entrepreneurs achieve their dreams through our connections, experience and support.”

Corporate venture-backed funding reached $86.9 billion in 2021, strongly recovering from $40.5 billion in 2020, according to CB Insights.

Among other retailers, Ulta Beauty, Amazon, Chipotle and Home Depot have launched funds this year largely focused on emerging technologies.

In the sports space, Foot Locker over the last several years has made minority investments in sneaker marketplace Goat Group, women’s activewear brand Carbon38, footwear design academy Pensole, livestreaming platform NTWRK, and two kids apparel and footwear startups, Rockets of Awesome and Super Heroic.

The biggest corporate venture fund in the soft goods space is LVMH-backed L Catterton, which has invested in Birkenstock, Everlane, Peloton, Build-A-Bear Workshop and several other consumer brands since being formed in 2016.

DISCUSSION QUESTIONS: What should Dick’s Sporting Goods hope to gain from its launch of DSG Ventures? What should the key priorities be for retailers when deciding on the investment criteria for such in-house funds?

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"Smart move by Dick's, and any retailer that follows, to connect with innovative brands and technology that could move the business forward through today's challenges."

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11 Comments on "Dick’s Sporting Goods launches ventures fund"


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DeAnn Campbell
BrainTrust

Once a retailer has found a multi-channel business model that works well and earns solid profits and customer loyalty, it only makes sense to turn their attention to longevity and keeping relevant in the future. Investing in fresh companies and ideas is one of the best ways to get first pick at new products, experiences and technologies that will keep them top of mind to consumers in years to come.

Bob Amster
BrainTrust

One of the advantages of investing in innovation concepts – whether retail or technology – is to accelerate the development of promising solutions and ideas and then use them as a competitive advantage.

David Spear
BrainTrust

DSG Ventures is a good move by Dick’s, which will be able to quickly spot early stage companies that capture consumers’ interest in gear, sporting activity and investment. I’ve seen many companies successfully launch and sustain their venture arm for years. This is not a fad, and assuming Dick’s has experienced leadership running the organization it will be around for years to come.

Jeff Sward
BrainTrust

This sounds like private label thinking that also understands that it’s a big planet with all kinds of great ideas out there in various stages of development. And that those ideas are worthy of an accelerated timeline by virtue of an investment. It’s a great potential win/win for both the retailer and the emerging startup.

Gary Sankary
BrainTrust

Dick’s realizes that they exist in an ecosystem, from sourcing raw materials to store assortments and sales. To be successful, they need partners to support them. Ensuring stability in that ecosystem by supporting partners is good business. It also opens up opportunities for Dick’s to support equity initiatives and build their brand by demonstrating a commitment to the community.

Tara Kirkpatrick
BrainTrust

Smart move by Dick’s, and any retailer that follows, to connect with innovative brands and technology that could move the business forward through today’s challenges and provide longevity into the future. Some retailers may have the ability to build this out internally but, for those that can’t attract the talent, a venture fund is an alternative route. We will see “fads” from this trend, in the form of retail-backed venture funds that lack a clear vision or the management to integrate the portfolio companies when KPIs are reached.

Peter Charness
BrainTrust

Smart move indeed. Large companies have trouble innovating – whether in products or technology. Participating and encouraging innovation from nimble companies is a great idea. Now whether retailers (who are not by nature venture capitalists) can pick the winners in the very early stages remains to be seen.

Mark Self
BrainTrust

Many companies have venture funds already so in my view Dick’s is late to this particular party. Assuming proper execution, this is a good move by Dick’s as it allows them to bet on new ideas without the burden of creating them in-house, which rarely works. $50 million is pretty modest for fund size, which tells me they are entering carefully, which is probably wise.

Ananda Chakravarty
BrainTrust

DSG ventures is in a great position to support new initiatives in retail sporting goods. Companies like SidelineSwap are already hitting it out of the park. As a coach in both football and baseball, I see resale of sporting goods as an important part of the U.S. sports footprint, the investment offers insights into current trends, pricing, and customer demand. The partnership in an adjacent market provides the ability for Dicks to run its machine more fluidly. Brilliant move to continue this kind of support and will give DSG a competitive leg up as well as a profitable downstream.

Brandon Rael
BrainTrust

Dick’s Sporting Goods has economies of scale, reach, supply chain and distribution capabilities, customer base, and name recognition that comes with being one of the market leaders in the sporting goods space. What is required to stay ahead of the competition is a continual fresh injection of innovative ideas, concepts, product advancement capabilities, and tools to keep Dick’s on the profitable growth trajectory.

DSG Ventures is a brilliant investment strategy that will enable Dick’s Sporting Goods to provide more personalized customer experiences, connect with the local communities, integrate innovations into its product development and customer experience models, and continue to grow and evolve its brand. The DSG Ventures is a clear win-win for Dick’s Sporting Goods and the wide range of brands that will benefit from this investment and become a part of the greater ecosystem.

Anil Patel
BrainTrust

Mature retail businesses like Sonae, Nordstrom, and Macy’s are adopting new strategies to secure strong future growth. Dick’s Sporting Goods’ launch of DSG Ventures will help them to revamp their existing position in the market. So I believe they have come up with an excellent investment strategy.
Two key considerations that retailers must take when framing investment decisions:
Invest in brands that can add more value to their current portfolio of offerings.
Planning investments around those companies that can help them upgrade their tech framework.

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"Smart move by Dick's, and any retailer that follows, to connect with innovative brands and technology that could move the business forward through today's challenges."

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