🦄 vol. 61
sash chats about the rise of padel 🏓
the padel boom 🏓
Damn. A lot has happened in the past week. Elon Musk finally bought Twitter; Big Tech (led by META) sent shockwaves through the global economy after releasing underwhelming Q3 earnings updates; Rishi Sunak relieved the lettuce of duty and became the new British Prime Minister; and heck, even Sandton was on edge about a potential terror attack.
Inhale… exhale. 🥵
And in an even bigger update, thanks to a severe case of FOMO, I finally caved and tried the one thing people just can’t stop talking about… padel.
So what’s this padel thing? 🤔
If you’ve driven through Joburg or Cape Town in the past few months, you’ve probably noticed a bunch of these tennis-meets-squash-kinda-looking courts popping up all over the place. Well no, it’s neither of the two – it’s padel.
🇲🇽 A Mexican businessman, Enrique Corcuera, founded the sport in 1969. The story goes that he didn’t have enough space to build a full-size tennis court at his holiday home… and the rest is history.
🎾 With elements of tennis, squash and badminton, it’s (dare I say) quite an easy game to learn how to play. Here’s a quick breakdown of the rules.
👯♂️ It’s almost always played in doubles, creating a really fun and social experience.
🏓 While the courts are 25% smaller than tennis courts, the racket and balls are also completely unique to the sport.
But despite being over 50 years old, padel has experienced a sharp rise to prominence in the last few years…
The boom 🚀
In the midst of the COVID pandemic, the Italian government identified padel as one of the safest sporting activities for its people to play. What soon ensued, like in other European countries, was a period of rapid growth.
A few stats to chew on:
📈 Over 25 million people play padel in over 90 countries around the world.
🇪🇸 There are over 6 million active padel players in Spain and more than 20,000 padel courts, making it the second most popular sport in Spain behind football.
📺 The 2021 World Padel Tour’s official YouTube channel recorded an average of 2.3 million live viewers per tournament (up 43% from 2020).
💰 The padel equipment market is forecasted to reach ~$337 million by 2028, with a CAGR of 8.1% (2022-2028).
The entry into (South) Africa 🌍
South Africa appears to be the first place on the continent where padel is establishing itself before expanding further north. Consumer demand is noticeably increasing, and new facilities are being opened at a rapid rate.
There are currently a handful of significant players in the 🇿🇦 market:
🏆 Primary player: Africa Padel - a South African-Swedish business consortium, aggressively investing in courts across the country.
🌱 Smaller player(s): Epic Padel; Padel Tennis; Action Padel (to name a few).
🆕 Newcomers: Virgin Active (the dark horse) - the famous chain of health and fitness centres recently announced its plans to open its own padel clubs around the country.
But what about the 💰?
💵 Upfront capital investment:
🧱 Assuming you already own land, I’ve heard via the grapevine that 1x turf court can cost in the range of R800,000 - R1 million to build.
🤑 Revenue streams:
🎟 Booking fees: Depending on the location, a 1 hour game will currently set you back anything between R300-R600.
🛍 Retail: Most of the facilities rent and sell the necessary equipment.
🍻 The entertainment experience: The facilities are (naturally) also becoming spectator hotspots and the preferred setting for post-game food and drinks.
But irrespective of where you choose to play, there’s one thing that’s constant across them all…
The booking app 📲
With around 1 million monthly active users, Playtomic (in my opinion) is the real winner in the padel boom. In its own words:
“Playtomic is the largest and fastest-growing community of racket sport players in the world.”
Some of its features:
🎮 Gamification: The app automatically builds you a player profile and ranks you based on your results.
🤩 Social: The app allows you to find players (with a similar ranking) to play against / with.
🎟 Centralised booking: You can book across most facilities, and filter for what’s closest or what’s available. Naturally, you’re charged a % fee per booking, and you can also choose to upgrade to a premium plan.
For example, the only way to book at Africa Padel is through the Playtomic app. You’re effectively locked in… but from a user POV, it just makes sense.
Future looking 🔮
Here’s 2x of my hot takes:
1️⃣ Scale: With incumbents actively building more courts across the country, it’s only a matter of time before we see the same across the rest of the continent. And with the likes of Virgin Active entering the space, the barriers to entry (initial capital costs and individual booking prices) should also decrease with time.
2️⃣ Franchises: We’ve seen the recent Major League Pickleball boom, and the likes of LeBron James and Tom Brady investing in teams. I wouldn’t be surprised if padel follows a similar route, and grows in popularity as a spectator sport.
What’s clear is that padel is on the rise. The question is: who’s going to benefit from the boom?
I’ll be watching closely. 🍿
sash
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