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B.C. tech wraps its tentacles around sports economy

West Coast companies uncovering growth opportunities in multibillion-dollar U.S. market
Drive Hockey Analytics COO Adam Nathwani said his company is focusing on underserved markets, such as amateur and youth hockey, which lack NHL budgets | Rob Kruyt

Just as the Vancouver Canucks began navigating the start of NHL free agency last week, another West Coast enterprise focused on hockey was stick handling its own business affairs in anticipation of a commercial launch this fall season.

“When you think about sports tech, particularly in Canada, it’s not really that big, considering some of the other markets … particularly the U.S.,” said Adam Nathwani, chief operating officer of Coquitlam-based Drive Hockey Analytics Inc.

The B.C. startup is looking to break into the big leagues of business with its AI-powered puck- and player-tracking technology. And this past June it began tapping expertise from the Future of Sports Lab (FSL), an incubator program based at Toronto Metropolitan University (formerly Ryerson University). The virtual program is aimed at connecting early stage companies with mentors and industry contacts as well as offering insights on business practices.

“Our market is … 10 times smaller than south of us, and so for success metrics and growth, all our companies eventually have a touch point in the states,” said Cheri Bradish, FSL’s founder and managing director.

Drive Hockey is now among the increasing number of West Coast tech firms capitalizing on new forms of revenue coming from the global sports economy.

Form Athletica Inc. raised $12 million from investors at the outset of the pandemic. Best known for developing high-tech swim goggles that display swimmers’ real-time metrics, such as stroke rate, the company has been using that capital to expand into new global markets.

“When you’re just selling hardware as a company, you’re focused on generating more revenue. And in order to generate more revenue, you have to get new customers,” CEO Dan Eisenhardt told BIV last October.

The company, which manufacturers its goggles in Taiwan, has been changing its business model and moving into software-as-a-service offerings that give goggle-wearers access to a library of swimming exercises.

“It’s a more honest relationship between you and the customer because you’re getting recurring revenues from that customer,” Eisenhardt said. “They’re paying for the service that they’re consuming, so you’re reinvesting in that service.”

West Coast tech companies have also been tapping revenue potential on the entertainment side of the business.

Dapper Labs Inc. reached a reported US$7.6 billion valuation last September after announcing it had raised US$250 million from investors looking to capitalize on its non-fungible token (NFT) offerings.

Backed by blockchain, NFTs offer certification of ownership for digital assets. Dapper Labs has been facilitating millions of NFT transactions through its NBA Top Shot marketplace that sells the digital ownership of NBA video clips featuring players showcasing their athletic wizardry on the court.

And if an American were to place a bet on any of those NBA games, it’s likely another Vancouver company is helping make that happen.

Prior to a 2018 U.S. court ruling, GeoComply Solutions Inc. was best known for cybersecurity services that detect if online users are trying to mask their locations using virtual private networks. Streaming TV services, for example, would use such technology to ensure that licensing agreements were upheld within any given country.

But after the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act, GeoComply emerged as a billion-dollar unicorn last year as it began providing its services to American states after the door opened to legalized sports betting. Demand for its geolocation filters spiked as states had to ensure users weren’t placing bets across state lines.

And media companies such as Victoria’s STN Video Inc. – best known for delivering video sports highlights to the websites of news publications – and Vancouver’s Akshon Media Inc. have also been driving revenue primarily from American partners.

“It’s definitely a growing scene [in Vancouver],” said Akshon CEO Roger Chan, whose company provides the post-game match highlights and video content for e-sports leagues such as the Overwatch League. Last month it re-signed its deal with gaming giant Activision Blizzard Inc. and is now providing its services for the Call of Duty League.

Akshon got its start in 2016 when Chan noticed a sizable gap in the market for e-sports news and began developing more video content aimed at fans who love watching gamers compete against each other for money.

Since then, the Aquilini Group expanded its ownership beyond the Canucks and into e-sports with the launch of the Vancouver Titans in 2019 – a team of gamers in the Overwatch League.

Meanwhile, Drive Hockey looks to be using a similar playbook as Akshon’s by working to fill gaps in the marketplace.

The startup specializes in player-tracking technology using sensors, wearables and artificial intelligence to provide teams with data on players’ on-ice performances. More than 3,000 data points of information per second are collected through wearables as well as sensors installed at the facilities teams play in. The company is also working on stick sensors and hockey pucks embedded with sensors.

Players’ speed, acceleration and stopping power are among the data tracked, as well as the basics like shots on goal and turnovers.

It’s the same kind of tech deployed by professional teams, but Drive Hockey is focusing on amateur and youth hockey to fill “a pretty big gap in the marketplace” for those lacking NHL budgets, according to COO Nathwani.

“Ultimately what we’re trying to do is bring new capabilities, more tools, more resources, and put them in the hands of those who frankly didn’t have access to them before.” 

Nathwani added that costs are reduced by tracking data less frequently than what’s needed at pro levels and by developing all the tech in-house.

Bradish, FSL’s managing director, said one of the reasons her incubator is eager to work with Drive Hockey is because of the latter’s focus on that underserved market.

“It creates opportunities for us to consider how we can help them grow, not only in that identified marketplace, but really sit back and think, ‘Are there other opportunities for growth?’” she said. “Ultimately, if you’re going to grow, [startups will need to] go south of the border and take advantage of the North American sport marketplace.”

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