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Fitness apps moving up to the big leagues

Jen A. Miller | March 9, 2016
If you use a free app to map your run, track your biking or monitor your fitness activity, most likely you're now feeding that data right into a fitness company that wants to sell you something.

In February, sports equipment company ASICS acquired FitnessKeeper, which operates the Runkeeper app. The move might have raised eyebrows if it had been the first brand to do this, but it was the third in recent app acquisitions by sporting goods-related companies. In August of last year, Adidas acquired Runtastic, and in February of 2015, Under Armour acquired both Endomondo and MyFitnessPal (UA had already acquired MapMyFitness in 2013). 

These are no small deals. Under Armour has spent $710 million on tracker apps since 2013. But for good reason: The wearable device market is expected to generate $6.3 billion by 2020, according to Tractica. And by spending big now, these fitness brands are buying up ready-made fitness communities, and all the data and engagement that accompanies them. 

Why buy?

All three fitness brands declined requests to be interviewed for this story; however, their statements about their respective purchases are similar. 

A statement from Asics referenced the growing fitness tracking app market and that it believes that the "integration of Runkeeper's'' globally recognized brand and worldwide user base with ASICS' technological competence in manufacturing will lead to continued enhancement of corporate value." User base at time of purchase: over 33 million registered users. Cost: $85 million. 

When Adidas announced its acquisition of Runtastic, Adidas group CEO Herbert Hainer said that the move was in line with its strategic business plan and that the acquisition "will add considerable value on our journey to deliver new world-class digital sports experiences. In addition, it offers the opportunity to grow a highly engaged user base, and leverage the power of our broad portfolio product." User base at time of purchase: 70 million registered users and more than 140 app downloads. Cost: $242 million. 

When Under Armour acquired MyFitnessPal and Endomondo, Kevin Plank, chairman and CEO of Under Armour, said in a statement that both acquisitions "have established track records of unmatched equity, expertise and passion in the fitness and nutrition space, and they are ideal partners to enable Under Armour to provide data-driven, proactive solutions to help athletes of all levels lead healthier and more active lifestyles." The press release also touted each company's existing user base, which included, at time of purchase, more than 80 million registered users for MyFitnessPal, and more than 20 million registered users for Endomondo and for MyFitnessPal, each. Cost: $475 million for MyFitnessPal and $85 million for Endomondo in addition to the $150 million it paid for MapMyFitness in 2013

One thing in common (aside from the millions of dollars being thrown around): Each fitness companies stress the importance of the apps' user bases. That's the real value here, says Sarah Newhall, executive vice president of strategy and insights for Blue State Digital

 

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