Kicking Off The Change: Sports Footwear Meets Startup Innovation

This shifting landscape reflects current trends in the sports industry, where innovation has become the ultimate competitive edge. Over 6,000 patents have been filed and granted in the sports industry in just the last three years. 

Additionally, the sportswear market is projected to grow at approximately 7% by 2027, creating fertile ground for startups and established brands to collaborate.

We're witnessing major players like Nike, Adidas, and Under Armour turning to startup partnerships to fuel their innovation pipelines. From Nike's venture fund to Adidas' pledge to make 90% of its products sustainable by 2025, these companies are investing in emerging technologies and fresh ideas.

In this article, we'll explore how these sports giants are leveraging startup ecosystems to maintain relevance, drive growth, and shape the future of athletic wear.

How Big Brands Are Betting on Startups

Major sportswear companies are rapidly shifting from traditional R&D models toward strategic startup investments. This trend represents a fundamental change in how industry giants approach innovation and market growth

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Why Nike, Adidas, and Under Armour are investing now

The timing of these investments isn't coincidental. The global sportswear market is projected to reach a staggering $300 billion by 2030, with the U.S. athleisure segment specifically expected to grow approximately 7% annually through 2028.

This growth landscape has created both opportunities and challenges. For giants like Nike and Adidas, who already control most of the market, maintaining their dominance requires constant innovation. 

For Under Armour, which has struggled with flat North American sales over the past decade, startup partnerships represent a potential path to revitalization.

Furthermore, these investments serve as defensive strategies. When Sports Authority went bankrupt in 2016, it significantly impacted Under Armour's distribution network, highlighting the vulnerability of traditional retail channels and pushing brands toward more diverse, technology-enabled business models.

The rise of venture capital in sportswear

Corporate Venture Capital (CVC) has emerged as a powerful force in the sports industry. According to research, there are now at least 28 different CVCs operating in sports, mirroring what software giants accomplished in tech over the past three decades.

Notable examples include:

• 32 Equity: The NFL's venture arm received $160 million in additional funding and has made strategic investments in companies like Fanatics and Hyperice

• DSG Ventures: Dick's Sporting Goods' investment arm focusing on retail/merchandise innovations

• Drive by DraftKings: Concentrating on betting and gaming opportunities

  
  

This trend extends beyond North America. Investment funds like Stadia Ventures operate as both accelerators and investors, having made 82 investments with 17 successful exits in sports and e-sports startups.

How startup partnerships align with long-term goals

These partnerships serve multiple strategic objectives beyond mere financial returns. 

For established brands, these investments create pathways to:

• Access emerging technologies without developing them internally

• Tap into specialized expertise in sustainability, digital engagement, and personalization

• Establish first-mover advantages in nascent market segments

• Build resilience against market disruptions

  
  

The rise of e-commerce and athleisure has created a favorable funding environment for sportswear startups, consequently making corporate partnerships increasingly attractive for both sides of the equation.

Inside Nike’s Startup Strategy

Nike has pioneered a unique approach to startup engagement, turning external innovation into a core competitive advantage. Rather than simply acquiring startups, the sportswear giant has developed a sophisticated ecosystem designed to nurture emerging technologies.

Nike's venture fund and CVC approach

At the heart of Nike's innovation strategy sits Nike Valiant Labs, an in-house incubator that functions as both a talent development platform and a startup launcher. This internal venture studio allows Nike to develop and test new ideas before committing significant resources.

Meanwhile, Nike's dedicated venture fund operates alongside this incubator, focusing on strategic investments that extend beyond immediate product applications.

Unlike traditional corporate venture capital, Nike employs a dual-track approach – funding external startups while simultaneously developing internal ventures. This strategy allows Nike to explore breakthrough technologies without the constraints of quarterly earnings expectations that often limit traditional R&D.

Key startup investments: from tech to sustainability

Nike's investment portfolio reveals clear priorities in digital technology and sustainability. Notable partnerships include:

• Invertex – An Israeli computer vision startup acquired to enhance Nike's digital capabilities, particularly in footwear customization

• Grabit – Robotics technology for manufacturing efficiency

• DyeCoo – Waterless textile dyeing technology supporting Nike's sustainability goals

  
  

These investments reflect Nike's recognition that innovation increasingly happens at the intersection of disciplines. Indeed, the company has positioned itself to capitalize on technologies ranging from advanced materials to artificial intelligence.

How Nike uses partnerships to stay ahead of trends

Beyond financial investments, Nike has mastered the art of collaborative development. The company typically embeds small teams within partner startups, creating direct knowledge transfer channels that benefit both parties. This approach accelerates Nike's learning curve while providing startups with invaluable industry expertise.

Moreover, Nike strategically leverages these partnerships to address emerging consumer demands before they become mainstream. For instance, by investing early in sustainable materials startups, Nike positioned itself to respond quickly to growing environmental consciousness among consumers.

Nike's approach demonstrates how established brands can maintain agility through strategic partnerships. Rather than attempting to predict every market shift independently, Nike has created an extended innovation network that serves as both radar and response mechanism for industry evolution.

Adidas and the Power of Collaboration

Adidas embraces an "Open Source" approach to innovation that fundamentally differs from its competitors. The German sportswear giant has developed a distinctive ecosystem where external collaborations serve as the primary engine for growth and creative development.

Photo by CHUTTERSNAP on Unsplash

Adidas' venture client model explained

Adidas pioneered "Base X," an internal platform that dramatically simplified open innovation processes for employees. This platform enables anyone within the company to connect with startups, creating what Adidas calls a "steady-stream of solutions" for in-store experiences, fabric innovations, and new product ranges. 

Subsequently, in 2019, Adidas launched "Platform A" at Station F in Paris, where selected startups develop digital pilots focused on retail, e-commerce, and sustainability.

Unlike traditional corporate venture approaches, Adidas Ventures operates primarily as a matchmaker rather than just an investor. The company seeks partners who can help "scale and exponentially grow specific priorities for the brand," as explained by Milos Ribic, Director at Adidas Ventures.

This venture client model focuses on two key buckets: materials innovation and engaging younger consumers within the sports ecosystem.

Notable startup partnerships: Carbon, Parley, and more

Adidas has cultivated partnerships with diverse startups that extend beyond typical supplier relationships:

• Carbon: This Silicon Valley tech company collaborated with Adidas to create "adidas 4D," featuring midsoles crafted through Digital Light Synthesis — essentially 3D printing with light and oxygen
  

• Parley for the Oceans: A cornerstone partnership where plastic waste intercepted from beaches and coastal communities is transformed into high-performance gear, with production scaling from 1 million pairs in 2017 to 11 million pairs in 2019
  

• BASF: Co-developed BOOST cushioning technology for maximum energy return
  

• Fashion for Good: Accelerates sustainable innovation through mentorship of circular startups

How Adidas blends fashion, tech, and sustainability

Adidas has masterfully woven these three elements into a coherent strategy. Their sustainability commitment has led to bold pledges, including the elimination of virgin polyester by 2024. Analogous to this approach, their Futurecraft Loop initiative created the first 100% recyclable performance shoe made entirely from one material without glue or solvents.

On the technology front, Adidas' partnership with Moncler demonstrates how they're exploring new frontiers in Web3. The collaboration includes NFT releases and AI-generated "adventurers" that bring their brand story to life in digital spaces. This initiative aligns perfectly with their broader goal of capturing the attention of younger consumers, particularly Generation Z, who "use fashion as a way of expression and a way of expressing their own beliefs".

By combining these partnerships with their internal innovation processes, Adidas has created a model where collaboration isn't merely supplemental — it's central to their business strategy and brand identity.

Under Armour’s Innovation Playbook

Unlike its larger rivals, Under Armour has crafted a tech-first innovation strategy built on performance analytics and personalized experiences. The Baltimore-based challenger brand has carved out a distinctive approach in the competitive sportswear landscape.

Focus on performance and personalization

Under Armour's innovation philosophy centers on measurable athletic performance. While Nike focuses on broad consumer experiences and Adidas on collaborative design, UA prioritizes data-driven improvements for athletes. This commitment manifests in their Connected Fitness platform — a digital ecosystem that has evolved from a simple tracking app into a comprehensive performance dashboard.

The company's approach stems directly from founder Kevin Plank's athlete-first mentality. Despite being smaller than its competitors, UA has leveraged this focused strategy to establish credibility among performance-oriented consumers. Their innovation centers in Baltimore, Portland, and Austin serve as hubs where athletic performance data translates into product development.

Startup collaborations in wearables and smart gear

Under Armour's acquisition strategy reveals their technological priorities:

• MapMyFitness (acquired for $150 million) – Expanded UA's digital fitness footprint

• MyFitnessPal and Endomondo – Strengthened their connected fitness ecosystem

• HOVR technology partnership with Dow – Created responsive cushioning systems

Nevertheless, UA has pivoted from pure acquisition to strategic partnerships. Their collaboration with IBM Watson resulted in personalized cognitive coaching capabilities, while work with Samsung integrated their performance platforms with wearable devices.

How UA is building a tech-forward brand identity

Primarily, Under Armour positions technology as central to their brand promise rather than as a supplemental feature. Their UA Flow technology platform exemplifies this approach — creating products where performance metrics drive design decisions.

Under Armour's innovation labs function differently than Nike's venture arm or Adidas' open-source model. Instead of seeking external startups for investment, UA builds technology partnerships that directly enhance their core performance products. Ultimately, this creates a brand identity where technology and athletic achievement are inseparable.

As a result, Under Armour has established itself as the data-driven performance specialist in a market where larger competitors must balance fashion, lifestyle, and athletic applications.

The Future of Sports Innovation. Startup Partnerships as the New Competitive Edge

The athletic wear giants have clearly recognized that innovation rarely happens in isolation. Through strategic startup partnerships, Nike, Adidas, and Under Armour have each developed distinctive approaches that reflect their brand identities while addressing similar market challenges.

Nike's dual-track venture strategy creates a powerful innovation pipeline, allowing the company to both develop internal ideas and absorb external technologies. Conversely, Adidas embraces an "Open Source" philosophy that treats collaboration as the cornerstone of their business rather than merely a supplemental strategy. Under Armour, despite being the smaller competitor, has carved out a performance-focused niche through strategic tech acquisitions and partnerships.

What unites these different approaches? Data-driven decision making and a recognition that tomorrow's market leaders must excel at both physical products and digital experiences. Additionally, all three companies acknowledge sustainability not just as a marketing angle but as a fundamental business imperative.

The startup ecosystem will undoubtedly remain crucial for sportswear innovation. Nevertheless, the nature of these partnerships continues to evolve. While earlier collaborations often focused on simple product improvements, today's partnerships tackle complex challenges like circular manufacturing, personalized performance analytics, and immersive retail experiences.

For consumers, this innovation race translates to better products, more personalized experiences, and greater sustainability options. For the industry as a whole, these partnerships demonstrate how even the largest companies can maintain agility through strategic startup relationships.

As the boundaries between sports, technology, and lifestyle continue to blur, the brands that thrive will be those that build the most effective innovation networks. Though each company takes a different path, all recognize the same truth: in today's sportswear market, the ability to partner effectively with startups might be the ultimate competitive advantage.

Elpis Labs bridges innovative startups with investors and industry partners to fuel growth and innovation. Whether you’re building the future or funding it, connect with Elpis Labs to unlock new opportunities and scale globally!

FAQs

Q1. How are major sportswear brands like Nike, Adidas, and Under Armour innovating? 

These brands are partnering with startups to drive innovation in areas like sustainability, digital technology, and personalized experiences. They use various strategies, including venture funds, open-source collaboration, and strategic acquisitions to stay competitive in the rapidly evolving sportswear market.

Q2. What is Nike's approach to startup partnerships? 

Nike employs a dual-track approach, combining an in-house incubator (Nike Valiant Labs) with a dedicated venture fund. This strategy allows Nike to develop internal ideas while also investing in external startups, focusing on areas such as digital capabilities, manufacturing efficiency, and sustainability.

Q3. How does Adidas collaborate with startups? 

Adidas uses an "Open Source" approach, emphasizing collaboration over traditional investment. They've created platforms like "Base X" and "Platform A" to connect with startups, focusing on materials innovation and engaging younger consumers. Notable partnerships include collaborations with Carbon for 3D-printed midsoles and Parley for the Oceans for sustainable products.

Q4. What sets Under Armour's innovation strategy apart? 

Under Armour focuses on performance analytics and personalization. They've built a tech-forward brand identity through strategic acquisitions and partnerships in wearables and smart gear. Their Connected Fitness platform and collaborations with companies like IBM Watson demonstrate their commitment to data-driven performance improvements.

Q5. How are these partnerships shaping the future of sportswear? 

These collaborations are driving advancements in sustainable manufacturing, personalized products, and immersive retail experiences. They're also helping brands stay agile in a rapidly changing market. For consumers, this translates to better products, more personalized experiences, and increased sustainability options in sportswear.