NBA deal sets up Calgary fan data company for shot at the big leagues

At a time when tech companies large and small are struggling and laying off employees in droves, one Calgary businessis marking a milestone partnership with one of the fastest-growing sports leagues in the world.

Last month, StellarAlgo, which uses rivers of data tohelp sports teamspredict fan spending behaviour, said it had entered a multi-year partnership with the NBA, adding it'll be working with all 30 teams in the league.

"It's massive," said Vincent Ircandia, theCEO and co-founder at StellarAlgo, describing the impact it willhave on his company.

"We see a big growth opportunity with the NBA."

The league's investment arm, NBA Equity, took an ownership stake in the privately heldcompany based in Calgary an indicator the league is confidentthe business canhelp identify and reach fans in their growing, global fan base.

While no numbers were released on the NBA's investment into StellarAlgo, Ircandia said the equity stake was "a significant commitment" from the league.

David Lee, thehead of NBA Equity, told BloombergNewsthe league saw excitinggrowth potential in StellarAlgo, notingthepromise of improving the fan experience was the "most important part of the deal."

Getting the NBA's attention

Ircandia, who was born and raised in Calgary,co-founded StellarAlgoin 2016withJoseph King and Sean Fynn local tech industry veterans.

Among StellarAlgo's early backers wereCalgary's InterGen and Thin Air Labs.

Prior to the NBA partnership, StellarAlgo had partneredwith the Brooklyn Nets, the Milwaukee Bucksand the Portland Trail Blazers, for whichIrcandia once worked as the No. 2 on business operations.

"Theseteams we were working with were just getting much more efficient and effective in understanding and nurturing fans with our software," Ircandia said. "And the NBA took notice."

StellarAlgoemploys 80 people, up from about 47 people in the summer of 2021. The company's last major injection of money came that year, when it received $16.5 million Series A funding led by Toronto-based Carallas Holdings.

Sandi Gilbert, the CEO and managing partner of investor InterGen, said what sets StellarAlgo apart from other tech companies is thatitclearly understandshow it adds value forits customers.

"When a company that hasbuilta great leadership team here in Calgarycan secure capital from a global franchise like the NBA, that's very noteworthy," she said.

Treasure trove of data

With fivebillion data points from 200 million sports fans around the globe, StellarAlgo's technology uses machine learning to offer major sports teams a dashboard on who their fans areand what they might want at a given point in time.

"The fan connects to a lot of different touchpoints now," Ircandiasaid.

"It used to be just ticketing, but now people are buying merchandise through e-commerce, they're streaming games online, they're playing fantasy sports.We have the ability to bring that data together to create a profile on the fan."

This ability to put a microscope on fans' habits allows StellarAlgo's customers to quickly craft laser-focused marketing campaigns to specific groups, avoiding mass email or app pushes that might annoy some or be irrelevant to others.

StellarAlgo brings value to fans, Ircandia said, because they are more likely to be offered products in which they are actually interested.

"Then the sports properties are also happy because they're much more efficient with their advertising spend, with their marketing efforts, because they're only messaging those right fans that'll bring impact," he said.

Across North America, StellarAlgo has more than 100customers, ranging from media companiessuch asWarner Bros. Discovery,to major league sports teams, including Canadian franchises such as the Calgary Flames, Edmonton Oilersand the Vancouver Canucks.

Big data and sports

The sports world is increasingly interested in big data, from tracking an athlete's heart rateto displaying stats during a broadcast, and now to honing in on what fans want from teams, leagues and sponsors.

"It's a huge component now of where sports is going, because the moneyball revolution has now evolved into an analytics revolution," said Moshe Lander, a senior lecturer at Concordia University and an expert in sports economics.

The mountain of fan data that StellarAlgo sifts through comes from ticket purchases, e-commerceand channels related to marketing, advertising and social media.

According to Lander, even if some fans were to opt out of such an agreement for privacy concerns, that still won't make them "invisible" to tech companies. Their silhouette, as it were, would stand out against the backdrop of those who opted in.

For years, privacy advocates have criticized how tech companies collect data onusers. Such concerns contributed to Apple's 2021policychange to its iPhoneoperating system to curb thetracking capabilities of platforms such as Facebook, Snapchat and TikTok, leading to significant revenue losses for the social media giants.

Data collectionon sports fans, Lander said, isthe sports world catching up to the current state of digital advertising. Sports is a business, after all, and whatStellarAlgo, the teams, the league and the advertisers all want is the same thing: more data.

"More data makes better decisions," Lander said. "So I don't see any reason why leagues wouldn't want to invest their vast billions of dollars in revenue that they're generating in companies that can deliver them those fine analytics."

Global ambitions

As sports becomesevermore woven into the fabric of modern life,its world-spanning industry remainssturdy even at times of economic uncertainty.

"There's fourbillion sports fans in the world today, and they are 10 times more passionate than any other customeron Earth," Ircandia said. "No one is painting their face to go to their favourite retailer."

This insight intothe context of the attention economy is what led to StellarAlgo's creation, and, as Ircandia tells it, continues to propel the company's growth, even at a time when the tech industry is experiencing tremors due to changes in the global economy.

For StellarAlgo, the NBA dealcould be aski jump into the broader global sports marketin which an estimated $70 billion USwas spent in sponsorships last year.

Ircandia envisions StellarAlgoone daybeing the discreet link between the world's 1,500 majorsports propertiesand the four billion people who might spend money on their fandom.

"We're just scratching the surface now," Ircandia said. "We think there's a real winner-takes-all opportunity here. We want all of those properties to be using our technology."