Thoughts On The Under Armour Acquisitions of MyFitnessPal and Endomondo

"Under Armour's demonstrated global leadership in health and fitness innovation is greatly enhanced with the addition of Endomondo and MyFitnessPal, as we continue to redefine and elevate the Connected Fitness experience for millions of people around the world."
- Kevin Plank, Chairman and CEO of Under Armour

And we in the health and fitness app world thought it was going to be just another Wednesday. Yesterday afternoon that all changed when news broke of two major acquisitions by a repeat offender. Athletic performance and fitness apparel brand Under Armour, who last year dove head-long into the consumer health tracking market by acquiring MapMyFitness for $150 million, are back for more in the form of two prominent fitness apps. European fitness and sports tracking platform Endomondo ($85 million), and the biggest mobile fitness app audience of all, MyFitnessPal ($475 million) nutrition tracker.
All told that brings Under Armour’s spend on health tracking apps to a cool $560 million from this week’s announcements, and around $710 million over the last couple of years. It's bought them access to a total audience of around 120 million registered app users, but what else might they be after? That’s a lot of chips to push into the middle of the table, but it does seem to make a lot of strategic sense if we take a closer look.
First, the location of the vast majority of the approximately 20 million registered users of Endomondo seems significant. They are centralized primarily in Europe, a region with a lot of well-to-do consumers, and much less traction for Under Armour than legacy competitors Nike and Adidas, who both enjoy significant market share across the region. We could see some major endorsement offers to European football stars in the near future to help catalyze this newly acquired consumer audience.
Speaking of international audiences, let’s not forget that MyFitnessPal launched localized apps for China, Korea and Japan last year, gaining significant adoption in major Asian markets that can be enormously lucrative but tricky to penetrate. So this 120 million user audience is not only the largest 'Connected Fitness' community ever assembled, but also the most diverse and widespread, providing inroads into major markets across the globe.
The location of this audience is important, but it is far from everything. For example, put a 120 million user database full of everyday fitness activities, and lifestyle choices in front of a well-funded analytics team with a plan. To state the obvious, the plan will be to find the optimal combination of ways to monetize that audience. For fear of rambling on forever, I won’t spell these options out, but generally speaking Under Armour has a huge opportunity to learn just about everything about consumer behavior in the fitness world, and to turn their huge database into significant pools of target personas with predictable purchasing behavior. And then they can use their knowledge of user habits to create new and innovative products just for them. And then they can use target segments of that audience to beta test new products. And the list goes on.
Now to a final note on what this acquisition means for other health tracking apps, their investors, and M&A activities. Under Armour’s aggressive moves to acquire their way into the space have collectively set some interesting baselines that can be extrapolated by speculators across the health tracking space to estimate valuations and potential acquisition prices. It’s even possible that this fact alone could cause a chain reaction leading to more companies being snatched up by strategic buyers. So the most interesting question that arises from Under Armour’s acquisitions might be as simple as, 'who’s next’?

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