Earlier this week, Under Armour announced the acquisition of MyFitnessPal and Endomondo, for $475M and $85M respectively. MyFitnessPal's reported user base is 80 million, while Endomondo's is at 20 million. And with the earlier acquisition of MapMyFitness, this brings Under Armour's digitally-connected community to about 120 million users.
This is important for a few key reasons, most obvious among them being the immediate expansion of Under Armour "zero-degree members" that now can receive direct communication from the company whenever they so choose. Assuming Under Armour completed these deals for the sole purpose of growing their community, they paid about $5 per user. As a user of either of those apps I would hope that my loyalty, activity, and attention would be worth more than that; for that alone Under Armour got a great deal.
Additionally, activity-tracking apps such as these create high switching costs, as users are reluctant to "lose" their history/mileage/accomplishments by using a different incompatible app. These types of apps create built-in loyalty, and they only get better and better the more you use them. In essence, people are naturally encouraged to remain within the Under Armour ecosystem for fear that in switching they would not get credit for all of their hard work.
Lastly, this deal provides access and ownership to a massive amount of first-party data. If Under Armour is able to know how a community of 120 million active consumers is behaving, they will likely be able to make some informed decisions that go beyond just the realm of digital marketing. This data could inform product mix, product innovation, allocation, distribution, launch timing, etc. More immediately, simply by knowing WHO each of those users are is HUGE - the fact that 70 out of the 120 million users are female may predict a bit more about where the focus of Under Armour's messaging will be targeted in the near future.
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