In this article we will discuss:
- the man behind the Billion Dollar Brand — Who is Ben Francis?
- What is the company he founded — Gymshark
- How the Company has been able to grow so quickly
- The latest investor — General Atlantic
- The new Shareholder Structure that means Ben Francis is now a billionaire
- Why the investment makes sense for General Atlantic — the expansion plan
Who is Ben Francis?
Before launching Gymshark, Francis developed two fitness applications, Fat Loss Abs Guide and iPhysique, which were both listed in the iOS App Store charts.While at university between 2010 to 2013, he worked for Pizza Hut as a delivery boy earning £5 an hour.He gave up six months after launching Gymshark.In 2012, aged 19, he launched Gymshark in his parents’ garage with school friend Lewis Morgan.The website initially sold fitness supplements. Unable to afford to buy his own stock or secure distribution deals with supplement suppliers, he began dropshipping supplies from other vendors and it took him six weeks to make his first sale.In 2013, Francis co-founded Manière De Voir, a unisex clothing and accessories fashion company based in the United Kingdom. He sold his stake in the business in 2018. 2013, branching out from supplements, Francis began designing and selling fitness apparel on Gymshark’s website.He began manufacturing the products from his parent’s garage in Bromsgrove, using a sewing machine and screen printer he bought with £1,000 of savings.He learned how to sew from his mother.Initially, he worked for Gymshark in between his university studies and job at Pizza Hut.During that time, the company was selling an average of £500 worth of sales per day.(Source:https://bit.ly/2PZOZ29)
Ben Francis in addition to his role at Gymshark documents and teaches about his experiences on his youtube Channel: https://bit.ly/3iPICLf
He has been featured by Forbes on their 30 under 30 list.
What is Gymshark?
Gymshark is a fitness apparel & accessories brand, manufacturer and online retailer based in the United Kingdom, supported by millions of highly engaged social media followers and customers in 131 countries. Created in 2012 by teenager Ben Francis and a group of his high-school friends. Gymshark has grown from a screen printing operation in a garage, into one of the fastest growing and most recognisable brands in fitness. This growth comes from a devotion to producing innovative, effective performance wear and an ever-expanding social presence, and above all a commitment to the Gymshark vision: Before there is an action, there is an idea. We exist to create the tools that help people unlock their full, incredible potential and put their ideas into action. Be all that you imagined you could be. Be a visionary. (Source:https://gym.sh/2E8S2lW)
The Gymshark Growth Strategy
Gymshark focused on key areas such as SEO(Search Engine Optimisation) were they regularly rank very high in keywords related to their business. They have also been able to use Social Media advertising on Sites like Facebook, Instagram, Pinterest, Twitter and also built a decent following on those sites through their own content and collaboration with influencers. Their best and by far biggest traffic source is YouTube, they did what all great, young innovative businesses do, they looked at the industry leaders and brought their strategies and business models into the present day by disrupting the industry. Historically, fitness brands like Nike and Adidas have sponsored athletes like Cristiano Renaldo, Micheal Jordan, LeBron James and so on, Why? because prior to the internet the only medium that was widely accessed by consumers was TV and attention is the most valuable commodity and nothing commanded more attention for fitness brands like sports. This is evident in how incredibly successful Nike has been with its partnership with Micheal Jordan, but we live in the 21st Century attention is no longer monopolised by our TV sets in fact cable TV is dying because attention now exists on the internet and primarily on youtube. Not only is the attention on Youtube but the new era of “fame” is on YouTube — the one where we feel as if we know the creators who’s work we consume at a personally level and their fans are very much willing to buy what ever they promote because we trust them and are dedicated to supporting them. Gymshark reached out to massive Creators like KSI who alone has a following of over 31 million. Taking into account that they endorse many more Youtube and Social Media athletes the business model because highly profitable and with high growth. They regularly host events and they have their own gyms and fitness centres. They have truly understood the needs of the end customer and have managed to build a very strong brand and community. This creates free press as people are willing to speak about the company to they friends and family and post online about their experience.
Who are General Atlantic?
General Atlantic is a global growth equity investor. They partner with leading entrepreneurs and innovative growth companies to deliver value for their family and institutional capital partners. Since 1980, they have identified disruptive businesses with transformative potential and helped them scale globally. They do this by serving as true partners and leveraging their patient capital, operational expertise and global platform.(Source:https://bit.ly/3h6ijQu)
General Atlantic has invested in companies like Wish.Com and Stock X. Their assets under management are over $35 Billion. (Source:https://www.crunchbase.com/hub/general-atlantic-portfolio-companies)
The new shareholding structure
Following this investment in the company, General Atlantic will hold a 21% stake, Ben Francis will hold a 70% stake which says his net worth as of 2020 to be $1,015 billion. Lewis who founded the company with Ben has officially exited the company after selling his stock for $131 Million. The rest of the 9% stock will be split between early employees and the overall management and team at Gymshark. The overall company being valued at $1.45 billion.
Why the investment makes sense for General Atlantic — the expansion plan
So far Gymshark has only had a strong market presence in the UK and some parts of Europe. With the latest investment they will now be able to have a dedicated Headquarters in the United States and Canada which will allow them to grow in the world’s largest consumer markets. With this strategy they can expect phenomenal growth and profitability justifying such a hefty valuation.