Adidas Buys GPS Fitness App Vendor Runtastic

The sports and footwear company is buying Runtastic to expand the digital connections of its many products with more health and fitness apps. 

Adidas, Runtastic, fitness apps, health apps, sports apparel, footwear, GPS apps, GPS

Adidas has acquired GPS fitness app vendor Runtastic in a $239 million deal that adds more digital fitness and health app tools to the sports equipment and footwear company's product arsenal.

Adidas will use the acquisition, which was announced Aug. 5, to expand its reach into sports science, wearables, sensor technology, and health and fitness monitoring so it can provide more capabilities for its customers.

Adidas Group "has found a perfect partner that fully understands the potential of the convergence of sport, digital and data in an always connected and always on-demand world," the company said in a statement. "Combining Runtastic's and the Adidas Group's capabilities brings the Adidas Group in a prime position to unleash its knowledge of sport."

Runtastic, which was founded in 2009, is based in Pasching, Austria, and has seen more than 140 million downloads of its more than 20 sports, endurance and fitness apps, according to Adidas. The apps, which are being used by some 70 million registered users, are available in 18 languages.

"This investment will add considerable value on our journey to deliver new world-class sports experiences," Herbert Hainer, CEO of Adidas Group, said in a statement. "In addition, it offers the opportunity to grow a highly engaged athlete user base and leverage the power of our broad product portfolio. Therefore, I am very happy to welcome Runtastic's passionate employees and their 70 million active athletes and sports lovers to the Adidas Group family. Adidas is the perfect strategic partner for Runtastic and we are very eager to leverage our business in new and unique ways in the future."

Florian Gschwandtner, the CEO and co-founder of Runtastic, said in a statement that the acquisition will combine the strengths of both companies. "Together, we will make exceptional and unexpected things happen," he said.

Several IT analysts told eWEEK that the acquisition makes sense for both companies.

"If you are going after a technology [product], it is generally better, particularly if this isn't your strength, to buy a firm that already has the core skill set you need," said Rob Enderle, principal of Enderle Group. "Adidas had their miCoach product, which had limited success, and they clearly felt they needed to strengthen both their offering and their team. This acquisition potentially does both and should significantly increase the utility and competitive performance of their fitness tracker solutions."

Charles King, principal analyst at Pund-IT, said, "Adidas is acquiring the energetic app maker to add features and functionalities to its own products, along with giving the company a shot of youthful joie d' vivre." But at the same time, he said, the $239 million cost of the deal "points to the growing competition in this market, and the inflation of value for fitness app developers. Even if it's paying a premium for Runtastic, it's probably wise that Adidas is moving ahead. The company is arriving later in the game than competitors, including Under Armour and Nike, and the value of fitness apps seems likely to climb even higher over time."