In-Depth: Under Armour's fitness app acquisition spree

By Brian Dolan
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By Jonah Comstock

When Under Armour bought MapMyFitness for $150 million in November 2013, Under Armour CEO Kevin Plank specifically told the Wall Street Journal it was not the start of an acquisition spree. This week, Under Armour changed that tune when it spent an additional $560 million to buy MyFitnessPal and Endomondo, giving the company a major foothold in food, nutrition, and fitness tracking as well as in the European fitness app market.

While one acquisition is always big news, a company spending that sort of money to snap up three of the biggest names in fitness tracking apps is more than that: it's a serious market consolidation that will change the nascent fitness tracking market. 

Why did Under Armour buy MyFitnessPal and Endomondo?

Plank explained the reasoning behind this week's acquisition at length in a recent call with investors.

"At the end of the day, the math is pretty simple," he said, according to a transcript in Seeking Alpha. "The more active someone is, the more likely they are to buy athletic apparel and footwear. And for the month of January, the four sites in our Connected Fitness platform, MapMyFitness, Endomondo, MyFitnessPal and UA Record, recorded more than 100 million workouts and added 4.2 million new unique users. So how do we come to this decision to invest in these communities and strategically add another tool and how we interact with our consumer?"

The first step, he said, was launching Under Armour's biometric tracking shirt, Armour39, and its associated app. With the fitness tracking app's launch, the company realized it was wading into a crowded and competitive world very different from the world of non-connected apparel, and that Under Armour, as a company, was better off focusing on its core competency: making shirts and shoes. Fitness apps competed not so much on technology, but on the communities they were able to build, and the way into that was through partnerships and, ultimately, the acquisition of MapMyFitness, he said.

"As we started working with [Robin Thurston, MapMyFitness CEO] and his team in Austin, Texas, it only reinforced our belief that the value is in the community -- especially one where the user is not just looking at their friend’s pictures -- which is providing you with data that empowers you to come back to them with an informed point of view to help improve their health and fitness," he said. "We understood that there was tremendous value in becoming that trusted brand and set out to assemble all the elements that would enable Under Armour to be the one place to access all of that information."

For now, all three fitness apps will operate as they always have, with little change noticeable to the user, Plank said. Thurston will still run Under Armour's overall connected fitness business, and Endomondo CEO Mette Lykke and MyFitnessPal CEO Mike Lee will report to him, running the international and US businesses respectively.

Over time, though, Under Armour wants its own app, UA Record, to "become the daily destination dashboard, aggregating all you want to know about your general fitness, sleep, steps, activity level and, yes, nutrition."

Why did MyFitnessPal and Endomondo sell?

MyFitnessPal consistently comes in at the top of rankings for user numbers, app download numbers, and even doctor recommendations when MobiHealthNews has reported on these sorts of lists in the past. It's especially well-known for having conquered both food and nutrition-tracking and activity tracking, and for appealing not just to dedicated athletes, but to anyone trying to lose weight or be more fit. Notably it seemed to be in a group of apps that had Weight Watchers running scared of a loss in business from free apps.

Why did founders Albert and Mike Lee decide to sell? Well, MyFitnessPal gathered a lot of its strength as an aggregator, launching its open API in 2012. Since then they've drawn in data from a number of different apps and wearables. That's a business that was likely feeling pressure from Apple HealthKit and other similar plays by Google and Samsung. Combined with a $475 million offer, getting out now seems like a smart move for the company.

Endomondo's motives seem a little more straightforward: Their user base number as of the acquisition, 20 million users, was the same number they reported in October 2013. It's likely that increased market saturation eroded their growth, and they may have been looking for a buyer. That lack of growth likely contributed to its $85 million price tag as well.

Is Under Armour taking on HealthKit, Google Fit, and others?

If Under Armour's goal to "become the daily destination dashboard, aggregating all you want to know about your general fitness, sleep, steps, activity level and, yes, nutrition" sounds familiar, it's because Under Armour is not the first company to want to be the dashboard for consumers' personal health information. Most recently, that was the dream of Aetna CarePass, a greatly publicized effort by the insurance company to create a hub for personal health data, which has now been shut down. Long before that, Google Health had a similar mission. There have been countless other less high-profile attempts.

And now, wellness data aggregation's time may have finally come, as a battleground is forming between Apple's HealthKit, Google Fit, and Samsung's digital health platform to become not just the go-to aggregation hub for patient generated data from different apps and devices, but also increasingly as a feed into a healthcare providers' EHR systems.

RunKeeper is another company that has made a move toward being a one-stop shop for data aggregation, with its HealthGraph. CEO Jason Jacobs told MobiHealthNews the company has since realized that space isn't worth focusing on for RunKeeper.

"The rich data sets we have, there’s a lot of good that can be done from an individual consumer standpoint and at an aggregate level for the world," he said. "We’re still interested in the data, but we’ll gladly pull the data from places like HealthKit and Google Fit. We still have the HealthGraph API, we support it, but we’re not wed to the fact that it’s got to be ours."

Even Facebook, which has shown scant interest in fitness tracking, bought Moves, one of the high profile activity tracking apps last year, which at least keeps the company's options open. And if anyone understands the value of communities, it's Facebook.

The data generated by the fitness tracking communities that Under Armour now owns helps them build new channels for selling apparel. They'll also help increase the number of buyers of apparel, as workout apps and devices hopefully turn more people on to exercising. 

The data helps the company create behavior profiles of Under Armour's ideal customers. At an event last year, MapMyFitness co-founder Kevin Callahan talked a little about that side of it.

"Now, with being part of the Under Armour brand, they’re incorporating a lot of our data,” he said. “We know when you work out and how you work out, and a company like Under Armour is really interested in understanding that to help them to sell apparel, help them to make you perform better, and help them to make you into a better athlete.”

Plank reiterated several times in the call that their large digital business was still subservient to selling apparel, so it doesn't seem Under Armour is "taking on" Apple. Certainly there's been no talk about Under Armour helping providers integrate patient generated data. But Plank sees this recent investment in digital for the benefit of his apparel sales as an indication of a paradigm shift. He pointed out that Under Armour's sales via mobile device have increased considerably every year, and that to him, a connected fitness platform struck him the same way the idea for Under Armour's original business did.

"To me it felt incredibly obvious, it reminded me when I made that first [breakthrough] and looking around and saying 'Has anybody ever done anything like this?' and 'Why everyone is still wearing a short sleeve cotton tee in the summer and a long sleeve cotton tee in the winter?' And I look and say no one has aggregated and put all of these pieces together and we don’t see anything coming. ... And what we see is with the acceleration of wearables and what’s happening there that we feel like we are positioned squarely in the center of what is supposed to happen."

From apparel to digital: a well-trodden path

Looking at Under Armour's bold play into digital in the context of the company's true competitors -- Nike and Adidas -- is perhaps more interesting. Nike has been committed to digital fitness, especially on mobile devices, and has helped pioneer it with its longtime partner Apple. Even with the reports of FuelBand's demise, it's hard to argue that Nike+ hasn't been successful.

Adidas' digital efforts in recent years have focused more on the sports team level than on the individual with its MiCoach system. It's also had a fitness sensing shirt product in the market for many years. Adidas and Under Armour have had some friction related to their respective digital businesses. Shortly after Notre Dame ended its 17-year relationship with Adidas and signed a 10-year deal with Under Armour, Adidas sued Under Armour for patent infringement in a still-ongoing suit that alleges that Under Armour's Armour39 system infringes on Adidas's patents. MapMyFitness was also named in the suit.

In September, Under Armour surpassed Adidas to become the second largest sports and apparel company in the United States. Nike still holds the number one spot by a comfortable margin (it had done $8.9 billion in sales as of September to Under Armour's $1.2 billion in the same period), but Under Armour is catching up, and Plank isn't shy about calling out his competitors. He told CNBC that with his company's digital strategy Under Armour will get ahead of the sports and fitness giant.

"That's what really led to getting behind wearables," he told CNBC. "For the first time we can say we're No. 1 in the world. I want my team to know what it feels like to be the largest in the world, the largest health and fitness digital community in the entire world."

On that score, post-acquisition Under Armour dwarfs Nike on nearly the same scale Nike outsells Under Armour: the last available numbers on Nike+'s community size was 30 million last year, a far cry from the 120 million unique users Under Armour now claims.

RunKeeper, Runtastic react to the $560 million news

MapMyFitness, MyFitnessPal, and Endomondo are some of the most popular fitness tracking apps in the market, but they're not the only ones with sizeable communities. Runtastic and RunKeeper are two other popular apps with tens of millions of users.

RunKeeper CEO Jason Jacobs says his team sees more opportunity following the acquisitions than danger.

"We think that who this will make it harder for is any brand that competes with Under Armour that doesn’t have a digital strategy," he said. "And as, [RunKeeper], a company who is a digital strategy, we see a great opportunity to help not just one of those partners but many of them. That is a higher risk approach than selling out , but it’s also a much bigger opportunity, because if we’re successful, then we’re not the digital piece of an apparel company, we’re the platform that works across any apparel company that doesn’t do it themselves."

Jacobs predicts that because Under Armour is an apparel company, it will be limited in what it's willing to do with the data it collects. That would open the door for more open-minded dedicated software companies.

"What we’re seeing is the data itself is really valuable beyond just commerce," he said "There’s a lot of really powerful things you can do in the world, starting from the consumer side, and I think my concern would be that if an apparel company is the one that’s driving the ship, they can use words like ‘open’ but I think commerce and apparel is where the innovation really stops. When there’s bigger, more important problems that can be solved with the same app."

Even Runtastic, a leader in the European fitness tracker market that might see new competition from Under Armour, says the news is overall good for the space.

"The announcement of Under Armour’s acquisitions this week shows that in order for apparel companies to continue to evolve and succeed, they need to become more digital," CEO Florian Gschwandtner told MobiHealthNews in an email. "We see this as a validation for the entire digital health and fitness space." 

A Brief History of Fitness Tracking Apps

By Aditi Pai and Brian Dolan

It's been almost 10 years since MyFitnessPal's website went live. Around that same time Nike began rolling out iPod-enabled running shoes. Seven years ago the fitness app tracking options began to grow and leading apps emerged -- some of which continue to dominate today.

The graph below shows user numbers from a small sample of popular fitness tracking apps -- as reported by the companies themselves over the years. It's important to note that not all fitness app companies mean the same thing when they announce "user" numbers. Some use simple download stats, others refer to members who register on their site, and other may only refer to users who have been actively using the platform within a certain recent period of time. In other words these are not perfect metrics, but relative to each other they provide helpful context for fitness app adoption over time:

Fitness App Downloads

There are thousands of fitness tracking apps. In the section to follow the MobiHealthNews rounded up nearly 10 years worth of news about a half dozen of them to provide some historical context for this week's past deals:

September 2005: MyFitnessPal website launched after founder Mike Lee wanted to lose some weight, but didn't want to log food with a paper and pencil. Read More

March 2007: Nike announces plans to make all of their running shoes Nike+ compatible. Read More

Spring 2008: Endomondo launched an alpha version of its app. Read More

August 2008: RunKeeper launched its app. Read More

Late 2009: MyFitnessPal launched its app. Read More

November 2008: Noom, formerly WorkSmart Labs, launched its first app, called Cardio Trainer. Read More

August 2010: MapMyFitness raised $5 million in a round led by Austin Ventures. The funds were used to expand the offering into new verticals. Read More

September 2010: Nike released Nike+ GPS, later renamed Nike+ Running, in the Apple App Store. Read More

June 2011: Former Technorati CEO Richard Jalichandra took the role of CEO at MapMyFitness. Read More

June 2011: RunKeeper unveiled a new feature called the Health Graph, which allowed users to aggregate data from the RunKeeper mobile app with other health and tracking services. The service launched in August 2011. Health Graph allowed users to see a unified view of workout data, social interactions, diet, and sleep habits in the aim of tracking and improving ones overall health and fitness. The data was presented in charts and graphs, which could then be shared with other users via a robust social media aspect. FourSquare, Zeo, Withings, Polar, Wahoo, and BodyMedia were among the first companies to participate in the program. Read More

September 2011: Endomondo raised $2.3 million in funding from SEED Capital. The company said the money would be used to increase staff (especially developers), add an office in the San Francisco Bay area, which was opened in March 2013, and create scalable revenue channels to secure profitability by year end 2012. Endomondo also raised $800,000 from SEED Capital in March 2011. This brought the company's total funding to $3.1 million. Read More

November 2011: RunKeeper raised $10 million in a round led by Spark Capital, which has also invested in Twitter, Tumblr, Foursquare, with participation from another new investor, AOL co-founder Steve Case’s Revolution Ventures. Return backer OATV, the venture arm of O’Reilly Media, also participated in the new round. The Boston-based startup, which now has 14 employees, planed to use the funding to grow its ranks and build out its product offering. Read More

January 2012: Nike unveiled its Nike+ Fuel Band device. The Nike+ Fuel Band leveraged just two sensors: the standard 3 axis accelerometer, which monitors activity, and an ambient light sensor that detects light levels in the user’s environment and automatically adjusts the brightness of the device’s display accordingly. The device’s display is made up of 100 white LED lights that show the time, Nike Fuel earned, calories burned, and steps taken. Read More

March 2012: Runtastic announced the availability of a GPS-enabled pulse watch and a heart rate chest strap. Read More

March 2012: Nike launched a beta version of its API. The API let developers build apps that work with its fitness offerings. Read More

June 2012: MapMyFitness raised $9 million in its second round of funding, which was led by return backers Austin Ventures and Milestone Venture Partners. The round also included contributions from a handful of new MapMyFitness strategic partners, namely the Competitor Group and The Running Specialty Group. Read More

December 2012: Nike launched the Nike+ Accelerator program with TechStars. The program aimed to quicken the Nike+ app’s transformation into a platform. Read More 

December 2012: Noom, a developer of Android health management apps, raised $2.6 million in its first venture round to expand its flagship product, the Noom Weight Loss Coach, into Korea. The round was led by m8 Capital, a UK-based firm that invests exclusively in mobile technologies. Its portfolio includes memory-enhancement app Evernote. Also contributing to Noom’s latest round were Qualcomm Ventures, Harbor Pacific Capital, and former Nexon executives. Read More

March 2013: MyFitnessPal launched its API, which connects with other digital health apps and devices, including BodyMedia, runtastic, Endomondo, and Withings. Using the API, users can integrate data from these devices into their MyFitnessPal food diary and exercise log. Read More

April 2013: Protogeo launched its fitness app Moves and raised $1.6 million in a round led by Lifeline Ventures and PROFounders Capital. Read More

June 2013: Noom launched a new Android app, a pedometer that tracks steps throughout the day while running in the background and only occupying about 3 percent of the phone’s battery life. Noom Walk counts steps throughout the day. Because it does not leverage GPS, the app uses less battery life. After tracking steps for 24 hours, Noom Walk uses around the same battery life as a GPS-enabled app will in three minutes. The app also includes some social features to share results with others who use the app and motivate friends. Read More

July 2013: MapMyFitness announced a partnership with retailer Brooks Running Company to create an online community, The Happy Run Group. The partnership encourages the sharing of running experiences on a variety of social networks including MapMyFitness. After each run, the user can rate his or her workout with options like “Crushed Goals,” “Kicked Butt,” and “Finished with a Smile.” When the user is at his or her desktop, the Run Happy Group also offers other features, like a Run Happy Instagram feed and motivational content from Brooks Running Company. Read More

August 2013: MyFitnessPal raised $18 million in the first round of funding led by Kleiner Perkins Caufield & Byers. Accel Partners also participated. Kleiner Perkins’ John Doerr and Accel Partners’ Andrew Braccia also joined MyFitnessPal’s board. MyFitnessPal said they would use the funding to grow the team and expand to more countries. Read More

August 2013: Endomondo added a training feature to the premium version of its Endomondo Sports Tracker app. The company also raised the subscription price of its premium app. The new function, called Endomondo Training Plans, helps users make a personalized plan to get them ready to run a given distance or increase their speed on a distance they’re already running. Options for training include 5k, 10k, Half Marathon, Marathon, or a custom distance. Endomondo also raised the monthly subscription rate for its premium app from $2.99 to $3.99 and the yearly rate from $19.99 to $29.99. Read More

September 2013: MyFitnessPal announced a partnership with health insurance company Cigna, which combines MyFitnessPal’s nutrition, physical activity, and weight management resource with Cigna’s health coaching programs. The offering gives customers the option to connect their MyFitnessPal accounts with their personal Cigna coach to instantly share their diet and exercise activity. Read More

October 2013: Endomondo reached profitability. The company said "the main revenue channels have become the subscription solution, called Endomondo Premium, as well as the paid Endomondo PRO app and advertising." At the time, Endomondo CEO Mette Lykke said she believed the increased adoption rate could be attributed to the social nature of the service and the launch of its Training Plans feature. Read More

October 2013: Runtastic launched a wirelessly connected, body fat-tracking weight scale. The company also announced the availability of a new narrative feature called story running. The app includes different story experiences in different genres: a travel story that takes the runner to Rio de Janeiro, Brazil, an adventure story about escaping from Alcatraz prison, a fantasy story about seeking magical artifacts to save the world, and a motivational personal coach. The Bluetooth Smart-enabled scale, called the Runtastic LIBRA, measures seven health metrics: weight, body fat, muscle mass, body mass index, body water content, calorie calculation, and bone mass. It also lets users set weight goals and measure progress against them. Data from the scale can be sent to a special iOS app or to Runtastic’s website. Read More

November 2013: Under Armour acquired MapMyFitness for a reported $150 million. Read More

November 2013: Protogeo released Moves 2.0, an iOS7-compatible update to its original all-day tracking iPhone app. Though Moves had historically been a free app, the newer version is sold for $2.99. Existing iOS app users who upgrade did not have to pay. Read More

January 2014: MapMyFitness launched Activity Feed, a more in-depth social sharing platform for MapMyFitness users. This was the first big announcement since it was acquired by Under Armour. MapMyFitness general manager Chris Glode told MobiHealthNews that the Activity Feed is not a product of the acquisition. With the activity feed, MapMyFitness users can see a Facebook-like social feed of all of their friends who have chosen to share with them. They can share and like workouts, routes, and updates. MapMyFitness also uses the data to calculate averages and rewards users who are in the top 10 or 20 percent for their activity, age, and gender. Read More

February 2014: Noom raised $2.9 million, bringing their latest round, which they started in January, to $7 million. The round was led by New York-based RRE Ventures with participation from TransLink Capital, Recruit Strategic Partners, Scrum Ventures, Qualcomm Ventures and Harbor Pacific Capital. Noom planned to use the funds to invest in its coaching feature cofounder Artem Petakov told MobiHealthNews at the time. The company also wanted to use the funds to expand the product, engineering, and design teams. Read More

February 2014: MyFitnessPal acquired fitness coaching startup Sessions for an undisclosed sum. MyFitnessPal is bringing the entire Sessions team onboard and, as a result of the acquisition, plans to begin offerings its users coaching programs. Sessions pairs users with coaches who communicate with them via phone calls, text or email to help improve their fitness. In addition to helping the Sessions user develop a schedule each week for going to the gym or other physical activity, the coach can also keep tabs on the user via their activity tracker data from devices like Fitbit or apps like RunKeeper — if the user gives them access or chooses to use such trackers at all. Read More

March 2014: Runtastic added a hydration tracking feature to its app. The app combines the user’s activity data, local weather conditions and specific information about the user to provide a suggestion for how much water to drink. Read More

April 2014: Nike laid off a majority of its FuelBand engineering team -- as many as 55 engineering employees of Nike’s 70-person strong hardware team were let go or possibly recruited by other divisions within Nike. Sources at the time said that Nike pulled the plug on all future iterations of the FuelBand and all future physical devices under development in its Digital Sports division. Read More 

April 2014: Social networking giant Facebook acquired Finland-based fitness app maker Protogeo, which offers the Moves app, for an undisclosed sum. After the acquisition, Moves made several changes to its privacy policy: assurances of anonymity in data collection were stricken, the section on third party data use was expanded, children are no longer allowed to use Moves, and users can now download their data. Read More

April 2014: RunKeeper launched a new iPhone 5 app, called Breeze, aimed not just at runners but at walkers and casual exercisers. The app uses the phone’s M7 motion coprocessor to track the user’s movements all day. The app tracks a user’s movement continuously throughout the day, and sends push notifications informing them of how close they are to reaching pre-set goals. It’s also designed to help give users an idea of when they’re already moving throughout the day and when they could fit in some additional exercise. Finally, the app gives recaps of the previous days’ movement every morning and allows the user to compare each days’ steps to previous days or averages. Read More

April 2014: RunKeeper launched a new feature for the iOS version of its app, last week. The free feature, Goal Coach, aims to help users stay motivated, but also help them pick goals that are both “realistic and specific”. Users who want to add Goal Coach insights to their workout are prompted to enter a motivation, including “lose weight”, “challenge myself”, “get fit”, “learn to run”, and “do a race”. Goal Coach will take “everything it knows about you and others like you” to help people set and reach goals. Some of these metrics might include what kind of self-described athlete the user is, gender, and weight. Read More

June 2014: Nike announced that a companion Android app is now available for Nike+ FuelBand SE customers. While the app’s description is almost exactly the same as the description in the Apple App Store, the Android version doesn’t offer the Nike+ Groups feature that lets users connect with friends, family and co-workers through leaderboard and photo sharing features. Read More

June 2014: Samsung partnered with MapMyFitness to launch a new version of its smartphone, called the Samsung Galaxy S5 Sport. Through this partnership, users of the S5 Sport got access to 12 months of a MapMyFitness MVP membership. The MVP membership offers extra features on top of tracking fitness including customized audio coaching, training plans, and live tracking. Read More

July 2014: Noom was added to the New York Digital Health Accelerator's second class, which was sponsored by the State of New York, nonprofit New York e-Health Collaborative (NYeC), and the Partnership Fund for New York City. Read More

July 2014: Runtastic launched a $119.99 wearable activity tracker, the Runtastic Orbit. The company aims to differentiate itself from the crowded activity tracker market by closely integrating the device with Runtastic’s existing ecosystem of fitness apps, and also by targeting the European market, which is not yet as engaged with activity trackers as United States consumers are. The Orbit tracks steps, calories burned, active minutes, and sleep. Read More

August 2014: Endomondo announces a second app, specifically for consumers with an iPhone 5s or newer. It tracks activity using the iPhone’s motion coprocessor to monitor activity without burning the battery life. The app supports syncing height and weight with the Apple Health app. Read More

January 2015: Noom raised $15 million. Han-Sing Hi-Tech Fund as well as existing investors TransLink Capital and RRE Ventures contributed to the round. The company’s total funding reached at least $24.6 million. According to an SEC filing, the funding “will be used for research and development, general corporate and working capital purposes, some of which may include salaries and/or other compensation paid to executive officers in the ordinary course of business”. Read More

January 2015: Endomondo branched out into corporate wellness and built a platform for employees around its Endomondo Sports Tracker app. Endomondo’s Employee Fitness program costs companies $34.99 per year or $9.99 per quarter per employee. Users have access to the premium version of Sports Tracker, which currently costs $3.99 per month for individual subscribers and includes the personal training plans Endomondo added last summer. It also offers weather information, distance tracking, calories burned, messaging with colleagues, and a historical reference of workouts. Read More