Genius Sports CFO says further sports tech M&A a potential option
CFO Nick Taylor emphasizes that acquisitions still need to meet a high bar, but the supplier is in good shape to be “front-footed” on the M&A pipeline
Genius Sports CFO Nick Taylor has said the supplier is looking to be “front-footed” when it comes to M&A but that acquisition targets will fall under its sports tech scope.
Speaking during a fireside chat at the 27th Annual Needham Growth Conference in New York on January 16, Taylor said the firm’s appetite for M&A had quelled given its high bar for sanctioning deals.
Genius Sports has been quiet on the M&A front in recent years, having acquired data tracking provider Second Spectrum for $200m back in May 2021.
That same month, free-to-play provider FanHub was snapped up, and then, in August 2021, data-driven video marketing platform Spirable was purchased.
Those deals were approved to bolster Genius’ non-betting arms, with the group’s Q3 2024 results revealing media revenue was $22.1m and sports tech revenue was $12.4m. Betting revenue totalled $85.6m.
Last September, Genius Sports denied speculation it was acquiring Kambi, a deal that would have significantly expanded its reach across the sports betting supply sector.
And while Taylor said acquisition targets would remain in the sports tech space given the fragmented nature of the sector, the CFO insisted that the high water mark would mean the business wouldn’t be rushing into deals.
He said: “We are becoming bigger and stronger. The sports tech industry continues to fragment, putting pressure on those smaller players.
“That was allowing those opportunities [and] they’re in a much more attractive valuation now. I think it’s the right time to be playing offense now.
“[But], we maintain our high bar for M&A. Nothing changes there. We’re only going to be looking at opportunities that are margin accretive and cash accretive.
“The third thing to note really is there are no gaps in our business model or technology. We will continue to remain disciplined when we look at opportunities.”
Taylor was quizzed on any potential approach for expansion in the betting field, with Needham’s Bernie McTernan pointing to the management takeover of IMG and the speculation Stats Perform is up for sale, or if sports tech was the future play.
The CFO played down any further betting-focused M&A moves, instead painting Genius Sports as a “natural consolidator of sports technology”.
When pressed on what M&A targets could bring to the business model and support its sports tech aspirations, Taylor said: “ Every league is different but there’s nothing that the leagues specifically are crying out for that we can’t provide or we don’t want to provide.
“Every league is different. It’s all about what the leagues are really look for, and its an enhanced experience and enhanced fan engagement.
“We have a wide suite of technology to be able to do that. There is, however, some interesting things out there. There is stuff, whether it’s in the ad tech space – this is really about classic buy [and] build, classic acceleration.
“This isn’t a need; this is a want. It’s about being front-footed. We’ve spent the last few years really focused on that execution,” he said.
“That’s what we’ve really been concentrating on the last few years, and now it feels like a good time to be moving into a more front-footed position, and this opportunity came along with the high-quality investors.”
Taylor’s comments came after Genius Sports released a statement saying it was aiming to raise $144m via a new share offering to existing and new investors. Management said the capital could be used to fund M&A.