Psst. Want to invest in an MMA startup and turn ‘wimps’ into ‘warriors’ around the world?
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Sitting at your desk and wondering what it would feel like to live the life of a mixed martial artist?
You’re probably not alone, if the early success of Wimp 2 Warrior (W2W) is anything to go by.
The company’s core product is a 20-week training program where office workers can learn what it’s like to train as a combat athlete.
Founded in Sydney by Richie Cranny, W2W runs the program through a global network of combat sports gyms. One such gym is the SBG in Dublin, Ireland run by John Kavanagh — coach of MMA superstar Conor McGregor.
On the investment side, co-founder Nick Langton has already got a seal of approval from some heavy-hitters in Australian business. The former CEO of Bridge Financial Services last year raised $2m from a group of investors including MLC Super CEO Geoff Lloyd, and media executive Richard Freudenstein.
W2W is now going back to market for more expansion capital via the Birchal crowdfunding platform. Speaking with Stockhead, Langton didn’t specify a target amount but said it would be bigger than the last raise.
“The business is fully formed and throwing off seven figures of revenue and growing revenue at triple digits,” he said.
“Speed to scale is something that we’re conscious of, because we’ve established a strong brand associated with biggest names in the sport. It’s important to capitalise on that advantage.”
So how did the concept of an MMA boot camp expand to around 50 gyms across eight countries? As it turns out, the story behind the original idea isn’t a bad yarn in itself.
Cranny was running an MMA gym in the Sydney suburb of Milsons Point, and wanted to prove the sport was accessible to the average gym punter.
Langton said Cranny put out a Facebook post out saying “I’m going to train someone with zero experience for six months. The only thing they have to promise me is that I’ll corner them and they’ll have their first amateur fight at the end.”
“Three days later, there were around 600 applications. So he pivoted and said ‘I’ll train a group, but I can’t do that for free’ — and they were all more than happy to pay.”
By standard gym measures, the W2W offering amounts to a premium service, but with a global MMA fanbase estimated at around 500 million, W2W reckons there are plenty of people willing to get a serious taste of life as an MMA fighter.
“The primary thesis is once we take a regular consumer, bring them into our gym network and they experience the level of consumer support and quality of training, they don’t go back to a regular bootcamp experience,” Langton said.
Having already taken on some material investments from a small group of wealthy backers, it seems reasonable that one could ask why W2W is now turning to the crowd. But Langton said the decision to utilise crowdfunding was a “really straightforward” process.
It started with the price point, which was set at a minimum of $100k for W2W’s first private raise.
“A lot of people in my network loved the investment thesis. They said ‘I’d love to contribute some capital but I can’t make a 100k ticket’,” Langton said.
“We’re also a prominent consumer brand; we’ve had thousands of people doing our programs and we’ve got reach across multiple jurisdictions. We wanted to create a vehicle to invest for our customers.
“What struck me talking to Matt (Vitale) at Birchal is that brands which have those underlying consumer attachments really have the ability to mobilise capital in a different way.
“So those two elements led me to think this process is tailor-made for us.”
As it deploys the funds, W2W’s primary aim is to expand its licensing footprint globally. The company will also invest R&D capital in “proprietary digital assets”, including a training app focused on fight techniques and general fitness tips.
While W2W will look to leverage the benefits of consumer engagement, Langton said the company also has a compelling business-to-business (B2B) use-case which makes it unique in the marketplace.
“It’s important to understand the commercial model. In a way it’s a health play, focused on anyone willing to spend money on a premium fitness experience.”
However, that’s only part of what attracted leading executives to invest in W2W’s initial funding round.
More important was “the fact that W2W has the primary financial data relationship with everyone who does our programs globally,” Langton explained.
“So we collect 100 per cent of the gross fees, take out the split and remit the balance of payments to the gym over the course of a 20-week program.”
That makes for a compelling proposition to potential partner gyms, who are relieved of the responsibility to chase payments.
“Anyone paying for a premium experience needs the flexibility of a tailored payment plan. They can log onto our payment gateway and adjust the frequency at a rate that’s consistent with their own personal cash flows.”
“We reconcile it but we also provide the consumer with a single point of trust globally; they’re dealing with head office, they’re not dealing with a local gym. It’s the perfect marriage of B2C and B2B.”
Having established a foothold in the major coastal US states, Langton said that market will be an area of focus for the company over the next 12-24 months.