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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Los Angeles Lakers legend Earvin “Magic” Johnson has just bought two new sports franchises—in the metaverse.
Johnson is investing in Beverly Hills-based SimWin Sports, a digital sports league where virtual teams and athletes backed by non-fungible tokens (NFTs) compete in simulated games. In addition to taking an ownership stake in the startup, Johnson has acquired a yet-to-be named basketball team and football franchise called the Los Angeles Magic. Financial terms of the deal were not disclosed.
Founded in 2019, SimWin Sports is among a crop of startups merging fantasy sports with blockchain technology. The league’s NFT teams are owned by well-known athletes and celebrities, from Hall of Fame NFL wide receiver Jerry Rice to former Backstreet Boys singer Nick Carter. SimWin fans, meanwhile, can buy, sell and trade NFTs representing fictional players who can be drafted by the league’s team owners. Those NFT holders can potentially earn money, too, when team owners like Johnson pay their players salaries and performance bonuses.
“This multibillion-dollar business is about to take off and the SimWin model is an excellent way for sports fans to get involved in this groundbreaking opportunity,” Johnson, who will also serve as an advisor to SimWin, said in a statement.
SimWin’s virtual sports contests are largely games of chance. Team owners can pre-set their game strategies and rosters, while player NFT holders may “train” their players to improve their attributes—but player performance itself is simulated through what SimWin calls an “innovative AI performance model.” The digital athletes, in turn, develop over the course of their careers and can go through hot and cold streaks, much like real athletes.
“From a fantasy perspective, for all those people who wanted to own a team—whoever wanted to be a player, manager or player agent—they'll have an opportunity to do that,” Andre Johnson, SimWin’s executive vice president of business development, told dot.LA. (Andre Johnson, a former gaming executive at Sherman Oaks-based Mythical Games and L.A.-based Virtual Reality Company, is Magic Johnson’s son).
The company has sold “dozens” of teams so far, including some for a seven-figure price, Andre Johnson said, while NFTs for players are expected to run between $300 to $600 for fans to purchase. SimWin also plans to generate revenue through merchandise and TV distribution deals, and aims to integrate sports betting through licensing deals with third-party sportsbooks, he added.
The 22-person startup expects to launch its first virtual football season by late summer or early fall, according to Andre Johnson. SimWin has raised $13.25 million in funding to date, according to PitchBook Data, from investors including 1UP Ventures, Animoca Brands, Infinity Ventures Crypto, Bron Studios, Kingsway Capital and YOLO Investment. The firm’s CEO is David Ortiz, a former senior producer on EA Sports’ popular Madden football video game franchise who’s also worked at the gaming studios of Sony and Microsoft.
Other companies are attempting NFT-based sports leagues of their own, including Hermosa Beach-based Fan Controlled Football, which lets crypto owners call the plays in real-life games. Andre Johnson called sports the “biggest form of entertainment,” but noted that most American pro sports leagues only run for a few months each year. SimWin—which says it will run games 24 hours a day, every day—is betting that die-hard fans will engage all year long with its more than 5,000 contests annually.
“We want everything that you would see from a traditional sports franchise,” Andre Johnson said. “All the ways you can generate money, all the things you can do, we're just doing it from a digital perspective.”
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
On this episode of the Office Hours podcast, host Spencer Rascoff talks with Mayor Suarez about his vision for building a tech hub in Miami and how the pandemic and changes in work culture helped it gain momentum.
Francis Suarez grew up around city government. His father, Xavier, was mayor of the city from 1985 to 1993. After earning a bachelors in finance and a law degree from the University of Florida, the younger Suarez followed in his dad’s footsteps, becoming the first Miami-born mayor in 2017.
He quickly set out to entice more businesses to the city.
“We had great weather, we had a great tax environment, you know, we were a very international city, those were things that were always present,” he said. “What we missed, or what we were lacking was a critical mass of doers that could make deals happen,” said Suarez.
The disruption that COVID brought to workplaces helped hasten Miami’s development, Suarez said, but he credits policies–including Florida’s reopening sooner than most other states after COVID lockdowns, lower taxes and his own efforts to “roll out the red carpet” to entrepreneurs–that made Miami a central destination for tech workers.
“We wanted to create sort of a c-suite concierge service for people who want it to build our economy and the KPIs on that are we're number one in the nation and tech job growth since then,” he said, adding that he thought the pandemic accelerated Miami’s transformation into tech hub, squeezing 20 years of growth into 24 months. “So I think our efforts have been successful at trying to create prosperity for our citizens.”
One of Suarez’s most interesting accomplishments has been creating a cryptocurrency specific to his city, MiamiCoin. He said he took to crypto early as a way to bring transparency and trust to the government.
“We don't trust our politicians, we don't trust their decisions. We don't trust, you know, the media,” he said. “So how do you restore that trust? You do it in a way or you design something that you can't manipulate,” said Suarez.
He said he hopes to overtake San Francisco as the VC capital of the world in the next two years.
Key to that effort, the lifelong Republican said, will be an approach that doesn’t try to shame entrepreneurs for their successes, something he said rival cities have done.
“I hear a lot of people say, ‘You know, I didn't move [to Miami] because of the taxes. I've moved, because I didn't feel wanted in the place where I live. I felt like I was a pariah. And I've come here and people want me to […] create high-paying jobs so that there isn't a guilt associated with success’,” said Suarez.
That, he said, requires humility on the part of government officials and an understanding that the government can’t solve all of society's problems.
”There are things that we can do to create more fairness,” he said. “Then we have to let the private sector, the NGOs, the religious organizations and society generally all come together as a community with a moral purpose, to try to make our world better.”
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
Techstars Los Angeles hosted its annual Demo Day on Thursday, featuring a cohort of 12 startups from across the world that are working in health care, space, ecommerce and more. The event capped a three-month accelerator program that all of the companies attended in person in Los Angeles, allowing a virtual audience to discover the seed and pre-seed ventures searching for funding and potential partners.
While the startups spanned from commerce to quantum computing, many of them had one thing in common: data collection. All of us are familiar with what data collection means for consumers: Spending just a couple days with my new cat-owning roommate, for instance, once spiraled into a deluge of kitty litter ads whenever I scrolled through my phone. For the startups, data collection means opportunities for creating solutions that can save companies money and help ease bottlenecks.
Showcases like Demo Day usually demonstrate the kinds of technology that investors think will have resonance in the market. The cohort’s health tech ventures, as an example, were largely spurred by issues in the health care system that were exposed by the pandemic.
Matt Kozlov, managing director of Techstars L.A. and a longtime investor in these industries, told dot.LA he specifically looked for companies that didn’t need to raise that much money—either by bootstrapping, becoming profitable early on or a mix of both. The startups leave the program with a $20,000 investment from Techstars; in return, Techstars gets a 6% stake in each company.
Rwazi, a Mauritius-based startup and Techstars L.A.’s first investment in Africa, was one of the presenting companies tapping into consumer habits of the developing world, which contributes $5 trillion to the global economy every year but lacks comprehensive data because a lot of digital transactions are not traceable.
The seed-stage company aims to collect and share consumer data from regions that conduct a large portion of transactions through cash. Using Rwazi, companies can analyze customer data like which demographics are buying their products, and the company’s “mappers” collect that information from small and large businesses and share it through the platform. Rwazi, which currently operates in Africa plans on expanding into South, Southeast Asia and South America. Joseph Rutakangwa, CEO of Rwazi, called that region alone a “$40 billion opportunity.”
Then there’s Pear Suite, a Seattle health startup serving the elderly population. Health care organizations lack data about patient behaviors that may allow them to provide preventative care before a grandparent falls ill or ends up in the emergency room, adding money to the already expensive health care economy. Pear Suite collects and leverages patient data that healthcare organizations can use to predict and avoid potential issues down the road.
Lastly, San Francisco-based Squid iQ came onto the scene after the pandemic’s upheaval of the antiquated hospital system, where ventilators and beds could not keep up with demand for care, and physicians had to make difficult decisions about who to treat. Poor medical equipment inventory has long plagued hospitals who deal with an array of emergencies and sometimes can’t locate a life-saving device. Squid collects data on the type of technology, how long it has been used as well as where it is located when not in use. The process may allow health care staff to spend more time caring for patients and help hospitals save money.
By and large, health care has fallen behind on optimizing data collection for the purpose of improving care, reducing costs and saving lives. Data collection, in some cases, is a game-changer—and it will be interesting to see if industries operating with archaic technology will embrace these startups, or if these new companies will hit the same bottlenecks as the ones before them.
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
Yasmin is the host of the "Behind Her Empire" podcast, focused on highlighting self-made women leaders and entrepreneurs and how they tackle their career, money, family and life.
Each episode covers their unique hero's journey and what it really takes to build an empire with key lessons learned along the way. The goal of the series is to empower you to see what's possible & inspire you to create financial freedom in your own life.
Suneera Madhani never wanted to run her own business. But when the corporate world left her feeling unfulfilled, she started her own payment processing company, Stax.
On this episode of Behind Her Empire, Madhani discusses how she dealt with feelings of self-doubt and drew on her family’s small business experience to launch her company.
Madhani grew up watching her parents run their convenience store. While working alongside her family, she said even simple moments, like her father instructing her to place stickers on cans with care and precision, taught her important lessons in entrepreneurship.
“Now as a mother and as an entrepreneur, I look back and I'm like, ‘Man, Suneera, that was your MBA—your entire life,” she said.
It wasn’t until her idea to change the payment processing system was consistently rejected by others that she finally considered founding it herself. But it took her family’s encouragement to take the first step. Even then she set a six-month time limit to make Stax work.
But her persistence paid off. The business she built inside her parents’ Orlando home has raised $245 million in venture capital; she now leads a team of over 300 employees.
“I literally love Stax the way I love like it's my first child,” she said. “I believe that business is personal.”
As one of the few female CEOs in fintech, she said she still struggles with imposter syndrome. It’s easy to get trapped in the cycle of needing to constantly achieve the next goal without stopping to revel in what she’s already achieved, she said. But it’s important to change the conception of what a founder can be so others feel like they can take the risk.
“The only piece of advice I have for you is to ask yourself, what's the worst that's going to happen? And I think that's the game-changer for me,” she said. “You realize that the worst is actually not as bad as we mentally make it out to be.”
Hear more of the Behind Her Empire podcast. Subscribe on Stitcher, Apple Podcasts, Spotify, iHeart Radioor wherever you get your podcasts.
dot.LA Editorial Intern Kristin Snyder contributed to this post.
Yasmin is the host of the "Behind Her Empire" podcast, focused on highlighting self-made women leaders and entrepreneurs and how they tackle their career, money, family and life.
Each episode covers their unique hero's journey and what it really takes to build an empire with key lessons learned along the way. The goal of the series is to empower you to see what's possible & inspire you to create financial freedom in your own life.
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