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I played competitive junior tennis in Southern California in the 1990s and Division 1 NCAA college tennis in the early 2000s. Many coaches back then made it very clear that my peers and I were extremely fortunate to have the latest and greatest innovation in tennis history: graphite racquets. In the ten years I spent as a coach myself, I can't think of anything to similarly rave to my students about. Sure, there have been more recent innovations in tennis, but they tend to the technical - apps, court automation, replay devices etc. From an individual player's standpoint, tennis has been stagnant. The same graphite racquets from the 1990s are fairly comparable to those of today, the balls haven’t changed, and most of us haven’t evolved to wear as much bright pink and orange as Rafael Nadal. 

Tennis is a great sport, one that allows anyone at any age to challenge themselves to develop skills and improve fitness. Major sporting brands like Nike (NKE) and Adidas (ADDYY) have substantial market share in tennis shoes and attire, but they simply are not incentivized to devote the resources needed to innovate or serve the tennis industry, which accounts for less than 1% of their revenue. 

On the plus side, this leaves room for small innovative companies to step in. And while these are crazy times for companies and investors, tennis is actually one of the best sports you can play during a pandemic. Here's a recent chart that shows how low the risk is.

With COVID-19 changing the landscape for social interaction, and therefore how sports are played and businesses operate, both in tennis and other industries there are opportunities for disruption and market entry unlike any other time in many investor’s lifetimes. One young company that appears to be well positioned in that regard is Slinger Bag Inc (SLBG). Not only has the company created what I consider a substantial innovation in tennis for players, but it also allows for high-quality practice alone amidst social distancing and is designed as a streamlined direct-to-consumer business.

Slinger Bag was created and patented by an avid tennis player, Joe Kalfa. Like many others, his busy schedule made coordinating regular tennis practice with the right partners impossible. With Slinger Bag, a new and portable ball launcher, Joe managed to solve his problem of accessing quality practice entirely on his own schedule. In 2018 his team launched the most successful Kickstarter campaign ever for a sports product.

With a million dollars of orders from the tennis world in hand, Joe pursued investor funding and a management team to take his fledgling company as far as possible. He not only raised an additional $2.5 million, but landed a management team with unparalleled industry experience. I was fortunate to speak recently with CEO Mike Ballardie, former CEO of Prince. I was already sold on the product, but Mr. Ballardie’s passion and vision for Slinger Bag piqued my interest as an investor. He has contributed to some of the biggest racquet technology innovations since my very earliest playing days and sees the tennis industry, as a whole, with a clarity that very well may be unmatched. Alongside Mr. Ballardie are industry veterans COO Tom Dye and CFO Paul McKeown, who bring a combined 75 years of experience, including as executives at Wilson, Precor Fitness, and Prince.

For those less familiar with tennis, I suggest asking your most avid tennis playing acquaintance to compare Slinger Bag to other products on the market and also ask if it’s something they would use. As a coach, I was asked to make ball machine recommendations more than a few times. I wouldn’t, simply because I had seen too many parents and players spend $3,000 or more on something they either couldn’t use properly or eventually saw as more work than it was worth. Starting under $550 and infinitely more practical, Slinger Bag would have been, without a doubt, something I would have been happy to recommend. 

The ball machine market is comprised of a few stalwart brands that cater to an undiscerning market. Nobody has tried to compete with them as long as I’ve been involved in tennis, primarily because the market is small and cost of production is very high. Many machines weigh several hundred pounds and require an electrical outlet. Tennis is already an equipment-intensive sport, making practice with a ball machine extremely cumbersome. Slinger Bag weighs 33 pounds and has a chargeable battery that lasts up to five hours. It also serves as a functional tennis bag, with space for racquets, a towel, a water bottle and more. Features that have been added over the years to traditional machines are speed and spin. Any high-level player will tell you, however, that no machine can replicate the way an advanced player hits the ball. You will not see Roger Federer or Novak Djokovic working on handling power or spin with a ball machine, but you may see them using one to practice repetitive technique and movement. In fact, you may be more likely see them doing so with a Slinger Bag, since it does the job more efficiently and effectively. 

As feedback and testimonials from highly ranked professionals to recreational players indicate, the product is a game-changer and it is now up to management to deliver. With 5,000 units sold, the volume has already exceeded that of any ball machine over the same period.

The official Slinger Bag launch in the United States will be July 2020. The product has earned endorsements from the best in the business, from world-renowned coach Nick Bollettieri to the greatest doubles team in the history of the game, Bob and Mike Bryan. While the company is focused on its flagship tennis ball launcher, there are many areas within the tennis market and across the huge sports equipment market that Slinger Bag management has future ambitions for. They have made inroads to the substantial Asian soft tennis market and spend considerable time in China perfecting engineering and manufacturing processes. Pickleball, the fastest growing sport both globally and in the United States, will see Slinger Bag product offerings in late 2020. Baseball and softball are also on the longer-term radar. Existing distribution agreements for the tennis ball launcher in Asia and Europe already total several times SLBG’s market cap and management is actively engaged in ongoing discussions with over 50 additional potential partners, including some of the industry’s most recognized brands. 

Slinger Bag has an experienced marketing team doing creative, cost-effective social media promotion. Their efforts, alongside public exposure as products enter the market this summer, will drive brand recognition and product awareness in the immediate future. Time will tell if the SLBG team can execute and gain substantial market share in the $10 billion global tennis market, but they’re off to a promising start and have the confidence of some of the biggest names in the industry, inside and out.

Investors should do their own due diligence before investing in any security. SLBG has a share price under $1, market cap under $10 million and is pre-revenue. Price moves in such securities tend to be volatile in either direction.