As the UK’s high-growth economy continues to evolve, increasingly more startups are reaching billion-pound valuations – otherwise known as ‘unicorn’ status. This rare breed of super-fast-growing, driven and fiery young businesses are gradually changing the face of British business.
This week, it was announced that sportswear and fitness apparel brand Gymshark is the newest addition to the UK’s herd of unicorns. The company secured a £200m investment from US growth equity firm General Atlantic for a 21% stake in the company. This makes it the second British company (after Checkout.com) to have achieved the £1bn status without any prior investment. Founder Ben Francis has increased his stake to around 70%, making him one of the wealthiest young entrepreneurs in the UK.
Ben founded the business eight years ago, when he was a 19 year old student, from his parent’s garage in Birmingham. He decided to abandon more traditional forms of advertising in favour of using social media ‘influencers’ to promote the brand.
The business soon skyrocketed in popularity, and has now amassed a community of over 2m followers on Facebook and more than 4.2m on Instagram. Gymshark currently employees over 500 people in offices in the UK, Hong Kong and Colorado. It has been featured in numerous high-growth lists (11 to be exact) and reported annual sales in excess of £250m in 2019.
Gabriel Caillaux, Head of General Atlantic’s business in EMEA, described the reasoning for the investment: “We believe Gymshark is an authentic, disruptive and differentiated brand. Against a backdrop of rising social media usage, rapid growth of e-commerce and increasing focus on health and wellness, Gymshark is positioned to seize the opportunity of further growth.”
The new influx of funding will be used to expand the business internationally, specifically in the US, where the company has already built its largest customer base, and Asia.
Despite the outbreak of COVID-19 the business has been growing from strength-to-strength. Whilst traditional high street retailers saw serious declines in sales, Gymshark reported its strongest quarter for revenue growth in Q1 2020. And, despite employment in the UK falling by the largest amount in over a decade between April and June, Gymshark has been actively recruiting throughout the pandemic.
Headquartered in Solihull, the business has also been supporting the wider fitness community. When gyms shut in the UK, it created a fund so that personal trainers could carry out paid virtual classes through its Gymshark platform. On top of this, it launched an NHS Sweaty Selfie campaign, which raised over £180,000.
Ben Francis, Founder and CEO of Gysmshark said about the investment: “I firmly believe Gymshark has the potential to be to the UK what Nike is to the US and Adidas is to Germany, and today is a significant step to realising that. It has been an incredible ride over the last eight years to get to this point, but today signals the next chapter in the Gymshark story. We are nothing without our community, so we will use this new investment partnership to get even closer to them on a truly global scale.”
Gymshark isn’t the only company to be fairing well amid the wider economic downturn. Our data shows that 17% of the UK’s high-growth and ambitious businesses have experienced a potentially positive impact from coronavirus and subsequent lockdown measures. Building relationships with these companies is essential for businesses who are looking to stay ahead of the curve over the coming months.
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