Retired NBA player Metta World Peace (formerly known as Ron Artest) had previously invested in Buttercloth and Splyce, but now, the NBA Champion is adding company founder to his resumé. This year, he launched XvsX Sports—a subscription service that aims to bring premium basketball experiences to players of all skill levels for as low as $5 per month. We sat down for a conversation with Metta World Peace and investor Stephen Stokols to learn more about this venture, which launched its beta phase on October 18, 2019.
PitchBook: Metta, you came up in an era in which players notoriously spent their money on lavish lifestyles and bad investments. Now, we have players like Kevin Durant and Andre Iguodala making a name for themselves in venture capital. How has that changed how this generation of players is transitioning to post-playing careers?
Metta World Peace: As our NBA careers were coming to an end, me and a lot of the players I knew at the time were asking: “What can we invest in? What can we do?” At the time, athletes were getting involved in any and everything. Now there is more. You have more access to deals. Now you see athletes making these amazing decisions and investing smaller amounts in 10 companies rather than investing two million dollars in one company without doing a lot of due diligence on the business. I’m inspired by guys like LeBron, seeing what they’re doing. I learned a lot from the young guys, you know. I learned a lot from the older guys. I learned even more from these young guys because they’re just active in funds and investing and I just love it.
PitchBook: How did you go about building your investing skillset?
Metta World Peace: After my career was over, I was worried. I was like, “What am I going to do?” I was super panicked. I literally woke up the next day, I called UCLA and took some classes. I knew I was good at math. I knew I love sports. I know I love philanthropy. How can I put that all together? And this project is a little bit of all of that. It’s sports. It’s digital, so it’s math and it’s philanthropy because we’re helping a lot of people find places to play. I did digital analytics at UCLA—just to refresh my memory and learn new things like social media. I did business analytics at Concordia Irvine—just kind of trying to figure out how I’m going to get involved, and that’s what led me to this point.
PitchBook: Looking forward, you’ll be looking to raise more serious capital, assuming this beta phase goes well. With a probable recession looming, do you have any concerns around raising capital in the near term future?
Stephen Stokols: This business model is perfect for recession. Gym memberships get canceled, and for five bucks, you get access to the courts. So to me, it’s recession proof. From that perspective, when it comes to fundraising, he’s [Metta World Peace] already got conversations going. I’ve actually been drawn into a few. There are a ton of strategic conversations already happening and it’s highly likely that there will probably be a round closed at the end of this year, maybe early next year, with some strategic investors. I don’t want to mention names right now, but guys who are in the sports tech space—guys who can add value—bring exposure. Also, when you look at it, I think there’s actually a big opportunity. Once you nail a market like L.A. and maybe even open a second market like New York. Then the question to investors is, can you go ahead, scale it 30 cities, and what’s it going to cost...I think there’s probably two significant fund raisers in the next 24 months.
PitchBook: What does success looks like for you during this beta phase?
Metta World Peace: For me, it would look like having a couple of thousand players signed up on the app in Los Angeles and people signing up outside of Los Angeles waiting for us to launch other gyms.
Stephen Stokols: For me, it’s a little more ambitious because we already have a couple thousand people signed up. Can we get to numbers that show tens of thousands, hundreds of thousands in L.A.? Because if you look at L.A. alone, there’s hundreds of thousands of players, which I think we get to where we can start rolling out the network of gyms. We’re going to be at 300 gyms. So to me, success is getting early indications that we’re going to be able to get 300 gyms packed and runs going from 10 runs a week to 50 runs a week to 100 runs per week in a pretty quick time. Even though it’s kind of closed down and very sort of stealth beta mode, there’s already indications that’s going to be there, so I’m excited to open the floodgates a little bit and bring on more people.