Stockhead: Bailador strengthens portfolio with $7.7m investment in fitness tech Hapana
- Bailador invests $7.7m in fitness studio management software platform Hapana
- BTI describes Hapana as a high-quality business with the positive qualities it seeks
- The investment in Hapana is Bailador’s third new investment in recent months
Special Report: Bailador Technology Investments has invested $7.7m in high-growth fitness studio management software platform, Hapana, which has a presence across 17 countries and high-quality clients including Body Fit Training (BFT), KX Pilates, Strong Pilates, Gold’s Gym, and F45.
Bailador Technology Investments (ASX:BTI) co-founders David Kirk and Paul Wilson said in their August report to investors the Hapana software was used by gyms and boutique fitness studios to manage classes, client memberships and billings, marketing, digital content, and monitor business performance in real time.
“Hapana delivers these features via a powerful mobile app that allows gyms and boutique fitness studios to better engage and communicate with their members,” the founders said.
Founded in 2014, Hapana was initially launched in Australia. The company has grown to employ more than 80 staff members globally and has expanded across the APAC region and into the US.
Positive qualities for a new investment
The Bailador founders said Hapana was a high-quality business with many of the positive qualities it sought in a new investment including a high-quality founder and a strong executive team with industry experience.
“Hapana is led by founder and CEO Jarron Aizen, who is executing on a plan to better serve gyms and boutique fitness studios that have been poorly served by large incumbents,” the founders said.
“Jarron has recruited an experienced executive team with strong sector expertise across both the fitness software and payments industries.”
The founders said Hapana operated in the large and fast-growing fitness software market, which includes gyms, health clubs, and boutique fitness studios worldwide.
“Hapana already serves clients across 17 countries, demonstrating the global nature of the addressable market,” they said.
“Hapana has attracted a roster of high-quality customers, including Body Fit Training (BFT), KX Pilates, Strong Pilates, Gold’s Gym, and F45.
“Over a million fitness club members engage with the Hapana platform as part of their studio membership.”
‘Significant growth potential’
Bailador noted that Hapana’s technology manages memberships, payments, retention, and loyalty for its customers, providing rich data features that facilitate expansion.
“The product can operate as a white-label solution, allowing customers to keep their fitness brand front and centre when engaging with members,” BTI’s founders said.
“Over half a billion dollars in payments were processed annually through the Hapana platform last financial year, contributing to exceptional year-on-year revenue growth.
“Hapana has significant growth potential, both domestically and internationally.”
Funds to grow global footprint
BTI has invested alongside OIF Ventures, which is investing $9.6m in Hapana, combining to complete a $17.3m investment round.
The tech-focused capital fund and OIF Ventures previously co-invested in Instaclustr, which was acquired by Nasdaq-listed NetApp in May 2022.
The founders said Instaclustr was a highly successful investment from which BTI realised $118.4m in cash on an $8.4m investment upon the acquisition by NetApp, representing a 14.2x multiple on invested capital and an 80% IRR.
The leaders said Hapana would use the funds to expand its global footprint, further cementing a leadership position in APAC and growing reach in the US.
“The funds will support expanding go-to-market plans in the US and across the APAC region, facilitating the signing of more franchises and independent gyms,” they said.
Hapana also plans to use the funding to invest in product development and fuel the launch of its second-generation platform.
“Hapana will modernise and streamline the user experience, and importantly, add functionality for large franchise fitness brands,” Bailador’s founders said, adding:
“This will provide customers with greater visibility and control over their network.”
Wilson will join the Hapana board as part of BTI’s investment with investment director Michael Hayes joining as a board observer.
BTI’s Investment Focus
BTI typically invests $5m–$20m in businesses within the technology sector that are seeking growth-stage investment.
Companies it invests in typically share the following characteristics:
- Run by the founders
- Proven product market fit
- Proven business model with attractive unit economics
- Huge market opportunity
- Ability to generate repeat revenue
The founders said Important verticals BTI looked to invest in within the technology sector include:
- SaaS and other subscription-based internet businesses
- Digital health
- Software
- E-commerce
- High-value data
- Online education
In August BTI reported its FY24 results including NPAT of $20.7m, up 282% on pcp and a final dividend declared of 3.4 cents/share fully franked representing an annualised yield of 7.8% when grossed-up for franking credits.
The investment in Hapana is Bailador’s third new investment in recent months, following investments of $20m in Updoc in May and $20m in DASH in June.
“Having been very selective with new investments and holding higher-than-usual levels of cash for some time, we’re excited to welcome three new high-quality investments that further strengthen the Bailador portfolio,” the founders said.