Swoosh: First Round–backed data analytics firm gets bought by Nike

Nike’s most recent acquisition has a Philly connection: the sports giant announced Thursday it acquired Zodiac, Inc., a data analytics firm for the consumer space dually headquartered in Center City Philadelphia and New York’s Flatiron District.

The 13-person team developed a technology platform that shows companies how much a customer will spend in the future, based on research done by cofounder Peter Fader, a professor at Wharton. Following the acquisition, the company terminated its relationship with all clients — a list that has included ModCloth, American Apparel and dressbarn — and will offer its services solely to Nike as a standalone division, Fader told Technical.ly.

Adam Sussman, VP and chief digital officer at Nike, said the acquisition meant adding “world-class data-science talent and best-in-class tools” to its team. It’s also part of Nike’s push toward digital transformation, at a sink-or-swim moment for the retail industry.

Congrats to Artem Mariychin, @faderp, @d_mccar and the entire @ZodiacMetrics team on their acquisition by @Nike! https://t.co/UGxKrcmzBF

— Josh Kopelman (@joshk) March 23, 2018

“Nike was a client and said ‘we want more,'” Fader said. “This just shows how serious they are about digital transformation. The fact that they’re putting their money where their mouth is says a lot about a company with such an iconic brand.”

Formerly known as CLV Metrics, in 2016 the company was the first to serve as a proof of concept of sorts for First Round Capital’s Dorm Room Fund when it raised a $3 million round led by the West Philadelphia VC firm. (That came after it had raised money from the student entrepreneur–focused Dorm Room Fund.)

“In the past, Dorm Room Fund portfolio companies have gone on to raise follow-on funding from investors such as Google Ventures, Spark Capital, and Union Square Ventures, and we’re excited to now officially have First Round join us,” said then–managing partner Lauren Reeder in a Medium post.

But wait: The Philly tie for Zodiac, which had its engineering core in town by way of a three-person team at MakeOffices, intensifies. Fader was Josh Kopelman’s professor during his time as a spry Wharton undergrad in the early 1990s. He even served as advisor to Kopelman’s senior year independent study project. For Kopelman, Fader’s company, led by CEO and cofounder Artem Mariychin and cofounder and Emory University professor Daniel McCarthy, had struck a chord in the market.

“Peter has been preaching the power of data-driven customer centricity for his entire career — and his methodology for determining customer lifetime value is unique and powerful,” Kopelman told Technical.ly Monday. “When he started Zodiac, he reached out to me. I made some introductions to FRC portfolio companies to get some real-world feedback and was blown away when one of those introductions became a more than $50,000 contract in less than two weeks.”

News of the exit come at the heels of a recently released Pitchbook report on VC returns among major U.S. markets. In the report, the greater Philadelphia area — including Camden, N.J. and Wilmington, Del. — tied with Los Angeles for the fourth spot in most returns. The median multiple on invested capital (MOIC, for you wonks out there) was X4.7.

No word yet on how this deal stacked up against the rest.