Golf startups aiming to secure a capital injection to grow their business typically seek out venture capital or take out a loan.
Sunday Golf, who have gained somewhat of a cult following as a purveyor of light six-club bags designed specifically for abbreviated playing experiences such as executive or par-3 courses, decided instead to go the equity crowdfunding route.
The Gen Z-friendly brand, that has since broadened their product line to include full-sized bags, are in the midst of a $1.2 million raise on equity crowdfunding platform Wefunder that puts a $15 million valuation on the San Diego startup that was hatched in August of 2020. The capital will fund purchase orders and bring aboard national sales managers and inside sales reps to bolster the company’s wholesale accounts and scale up.
When you think of nascent brand crowdfunding endeavors, consumer minds instantly turn to Kickstarter campaigns where customers are often paying in advance for a product that will be released at a future date. But this is a different animal altogether and Sunday Golf founder and CEO Ronan Galvin admits that messaging has been important.
“There’s definitely been a learning curve talking to people about it and that analogy is dead on. It’s like Kickstarter for actual equity versus investing into the pre-launch of a product,” Galvin said. He spent a decade in the bag industry as an independent broker connecting large players in the space with a network of factories in China before he was afflicted by the entrepreneurial itch.
Galvin sent an email out to Sunday Golf’s customer list around six months ago to test the waters to see if there would be interest and the response was enthusiastic enough to give it a go. The marketing aspect of the endeavor which effectively turns fans of their products into owner-ambassadors certainly wasn’t lost on him. That rationale being that stakeholders with skin in the game would be motivated to act as vocal spokespeople posting on their social streams about Sunday Golf.
“Whether someone invests $50,000 or $500, more or less they’re going to evangelize the products to the same amount of people. The coolest part of this whole thing has been getting our community and the golf community at large involved,” Galvin said.
This isn’t the first time a Sunday Golf initiative has garnered attention. Last year they made headlines when they signed 6-year-old golfer Patton Green, a Southern California State Champion in his age cohort, to an NIL deal. A few months back they added Tom Brady—no relation to the former football superstar—to their ambassador roster and created a line of bags in collaboration with him benefiting Youth On Course.
Investor Risks
It’s one thing to buy a golf bag, it’s quite another to invest in the company that makes it. Those who’ve decided to become stakeholders undoubtedly believe the company could follow a similar trajectory to apparel player TravisMatthew, which Callaway acquired six years ago for $125 million. However, any decrease in overall industry growth or increased competition could affect investors’ chances of realizing a return.
The Wefunder campaign closes August 15th has so far raised just over $900,000 from 556 investors. Sunday Golf started up during the covid golf boom and have accrued $8 million in lifetime sales with over half that tally coming in 2022 and they’re projecting a $7.1 million topline in 2023.
Their financials are not all roses and sunshine though with 2022 net profit shrinking by 11% over the prior year. Galvin mainly attributes that shortfall to temporarily elevated shipping costs.
“Right now, we get containers for $4,000-5,000 and during Covid shipping containers were $20,000. Unfortunately, you can’t fit a whole ton of golf bags in a container like you can watches or apparel, so we really felt the brunt of that,” he said. Galvin emphasized that reduced shipping prices coupled with the strategic decision to move into their own warehouse to handle fulfillment themselves has positively impacted profitability.
To date, Sunday Golf has sold over 100,000 bags though an omnichannel network, including 600 pro shops along with retailers like Amazon
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Galvin sees plenty of runway looking ahead for what they’re offering, ‘gear for the casual competitor,’ who prioritizes quality downtime with friends. That’s an ethos that could extend to outdoor adventure and pickle ball and transform Sunday into a modern-day Wilson Sporting Goods with a broad focus on bags, gear and accessories.
“I think there is a big market there when it comes to expanding into adjacent sports down the road. I caveat that by saying we have our head down fully focused on making the best golf bags possible for the next three to four years,” Galvin adds.
Source: bing.com
