A BUSINESS backed by Scottish tennis star Sir Andy Murray which aims to create hundreds of courts for fast-growing sport padel says it expects to be making “significant profits” by next year after being valued at £10 million.
Edinburgh-based Game4Padel yesterday revealed it had raised a further £1.3m of equity in a funding round which had valued it at £10m, as it pursues development of a UK-wide network of playing facilities for the tennis-squash hybrid game, which it described as “one of the world’s fastest-growing participation sports”.
It added that the game was “spreading rapidly across the UK, continental Europe and the rest of the world”.
Game4Padel’s co-founders include Jim McMahon, chairman of football club Motherwell. Mr McMahon, a co-founder of Ayrshire entrepreneur Sir Tom Hunter’s West Coast Capital investment business, is chairman of Game4Padel.
Michael Gradon, anotheIr co-founder of Game4Padel and the company’s chief executive, was on the board of the All England Lawn Tennis Club, which owns and runs the Wimbledon Championships, for many years, stepping down in December 2019.
The other co-founders of Game4Padel are Peter Gordon, a chartered quantity surveyor who has worked for Tennis Scotland and SportScotland and founded the Thistle Padel Club in Edinburgh, and tennis coach Vincent Hivert.
The four co-founders were joined on the board last year by Carlos Sabugueiro, who has had a number of senior roles across the financial and automotive industries in Asia and the Middle East
Game4Padel, which has a core team of around 10 at the moment, predicted “exponential” growth in direct and indirect employment as it looks to open 50-plus venues “over the next couple of years”.
The company currently has five venues.
A spokesman said: “Current income isn’t that material at present as three of the company’s five venues have only been operating for a few months as a result of the pandemic. Game4Padel expects to reach cash-flow break-even shortly and be making significant profits by next year.”
Asked about Game4Padel’s business model, the spokesman replied: “Players pay to use the courts with revenue shared at an agreed rate between Game4Padel and the venue. Game4Padel will also generate income from corporate [and] individual memberships and ancillary income including sponsorship, equipment rental [and] sales.”
He noted a monthly membership secured players discounted fees at all Game4Padel venues and special offers, for example on equipment.
The spokesman said the company was “entirely owned by individual investors, including from business/finance as well as padel enthusiasts”.
He added there were currently “50-plus investors”.
The new capital will go towards building up to 300 new courts within the next five years.
The company noted its two previous fundraising exercises – on inception in 2019 and then in March 2020 – had both been “heavily oversubscribed”, raising a total of £1.25m.
It added: “The company is deploying capital so quickly, to meet the growing demand for padel courts from a range of UK partners, that it is already considering launching a fourth round of fundraising later this summer to ensure it can keep pace with demand.”
When he announced he was adding to his investment portfolio with a stake in Game4Padel in May 2019, Wimbledon, US Open and Olympic champion Sir Andy said: “It’s great for young people to play a variety of sports and padel is a fast-paced game which is excellent for developing hand eye co-ordination and racket skills.”
Last month, Game4Padel signed heads of terms with retail destination Westfield London to install and operate three covered outdoor courts and two pop-up show courts. Subject to planning, the three permanent courts are expected to open in January next year.
In April, as the UK emerged from the latest lockdown, Game4Padel opened a padel venue in Wales, at Windsor Penarth near Cardiff.
Game4Padel said: “The firm is also in detailed discussions with some 50 other sites – including major retail destinations, business parks, leisure centres as well as sports venues – which it anticipates will add more than 50 courts to the seven already in use at its five current UK venues.”
Mr McMahon, chairman of Game4Padel, said: “This is an incredibly exciting period for our company and for the game of padel in the UK.”
He added: “It’s not often a business can say with certainty that it is in the right place at the right time, but given the vast experience in our team, the growth potential of the sport, our investor and capital base and the huge demand we are experiencing, I feel confident in saying that now.”
Game4Padel said its latest funding round had “further strengthened the firm’s investor base by introducing new backers to an already diverse and experienced group that includes company ambassadors and broadcasters Annabel Croft and Andrew Castle, the former British number one tennis players, and Jonathan Davies, the Welsh rugby legend”.
Mr Gradon said: “Padel is at a tipping point in the UK, in terms of participation and popularity, and we have an ambition to be a major part of that growth story over the next few years, using our knowledge and expertise to develop the best facilities in the best locations for the best overall user experience.”
He added: “We have a high degree of confidence that we can deploy all the equity raised in premium UK sites within the next 12 months. Our first four venues are already operating ahead of our financial projections, despite the lockdown restrictions of the last year, and we recently opened a trial court at the prestigious 4,000-member St George’s Hill Lawn Tennis Club in Surrey, which we hope will prove the case for three permanent courts to be built there.”