As it looks to make immediate inroads in the impending collegiate name, image and likeness market, digital marketplace Icon Source closed a $1.6 million seed round with support from existing and new investors, including Hawke Ventures.
Hawke Ventures, whose portfolio includes subscription box company FabFitFun and beauty and wellness festival host Beautycon, is the venture capital arm of marketing consultancy Hawke Media. Icon Source’s chief revenue officer Scott Taylor previously held the same role at Hawke Media, which has worked with several thousand brands to date. Icon Source said it plans to tap into that expansive network as it continues to bring companies onto its platform.
Icon Source directly connects athletes and their agents with interested brands and potential endorsement opportunities on its digital marketplace, functioning almost as a commercial dating app. The platform, which is currently open to professional athletes, handles deals from start to finish: AI technology pairs the athletes and brands—national and local—based on social audience demographics, sport and personal interests, among other factors. A communication system and contract wizard takes transactions through the middle stages, and Icon Source can facilitate payment through its platform at the end.
The new seed funding will specifically support the company’s continued expansion as it prepares to start managing deals for college athletes this summer.
“Everybody seems to be coming up with a solution to educate universities or to disclose these deals, but nobody is telling students where you can go actually get paid and still protect your eligibility and sign smart contracts,” Icon Source CEO and founder Chase Garrett, a former Red Bull athlete marketing manager, said in an interview. “Instead of relying on all these new companies that are trying to launch into this market, we’re taking our strategy that’s been proven on the professional levels, and is trusted by agents, to college athletes.”
The Denver-based startup tapped former college and NFL football player Drew Butler to head its collegiate division earlier this year after announcing plans to open its platform to college athletes as early as July 1, when states including Florida, Georgia and Mississippi will allow athletes to start endorsing products and signing marketing deals.
The NCAA’s delay on its own proposed NIL rules changes has not affected Icon Source’s plans. The company said it is particularly well positioned for the college endorsement market because of several NCAA compliance-friendly features on its platform. They include preloaded contracts and an ability to pass transaction and deal information along to the appropriate disclosure partners at universities, as will likely be required by athletic departments or the NCAA.
The company takes what Garrett describes as a small percentage of each deal done from both the brand and athlete side.
“We believe we’re bringing significant value to both parties by connecting them, ensuring the payment and then allowing them to actually be protected so that one party isn’t being extorted for reasons someone may not have read in a contract,” he explained.
Upon its launch in 2019, Icon Source raised a small first seed round of $500,000 to get the company started, which took it through 2020. Initial investors included NBA player Mason Plumlee and former MLB first baseman Adam LaRoche, along with other professional athletes across action sports, football and the Olympics.
All of Icon Source’s initial investors kept their pro-rata ownership stakes in the most recent raise. Pro-rata rights give investors the opportunity to participate in future financing rounds to maintain their percentage stake in the company if they so choose.
In December, the startup announced the opening of its Series A funding round, which was projected to close around $3.5 million in early 2021 with commitments from existing and new investors. Those plans were put on pause this year when the Icon Source team capped its funding and instead pivoted to a smaller seed round that would take less time to raise.
“We wanted to spend this time focused on growing our business instead of raising another round,” Garrett said. “That takes a lot of time, effort and energy, and we thought there was so much opportunity now to really capture the market because we believe we have something really exciting to offer in a time of need.”
Garrett said Icon Source will pick the Series A mantle back up this winter after the company’s collegiate business is off the ground.