Alta to IPO in the US following astonishing gym growth

A group of Aussie tech entrepreneurs are set to list their company on a major US stock exchange. Backed by some of the most prominent high-net-worth and institutional investors in Australia, Alta believes it has achieved astonishing growth on its journey to becoming the key fitness marketplace within one of the largest and fastest growing sports markets in the world – mixed martial arts (MMA).

A group of Aussie tech entrepreneurs are set to list their company on a major US stock exchange. Backed by some of the most prominent high-net-worth and institutional investors in Australia, Alta believes it has achieved astonishing growth on its journey to becoming the key fitness marketplace within one of the largest and fastest growing sports markets in the world – mixed martial arts (MMA).

The UFC is seen as one of the great growth stories, and Alta is positioned to capitalise on this new era of mixed martial arts fan mania. Acquired for just US$2 million in 2001, the UFC’s value has grown 48.56% CAGR to reach a valuation of US$12.1 billion in a merger and public listing announced in April 2023.

Some investors are now looking for ways to gain exposure to this industry through opportunities that are earlier in their growth cycle, and Alta, who are working on listing on a US exchange later this year, is one of very few options to do so.

Alta has developed a global platform that helps the estimated 100,000 plus largely independent MMA gym owners by providing them with payment systems, payment solutions, marketing and training programs to help them monetise the interest of fitness enthusiasts and MMA fans to practice martial arts and MMA at an amateur level. While the professional side of MMA has grown astronomically, the grassroots movement has been completely under-marketed, leaving a substantial gap for Alta to tap into.

They are on track to clock over US$4.5 million in revenue during CY23, which they expect to increase to almost US$40 million in CY24. They have over 3,750 gyms on their platform across the USA & Canada, UK & Ireland, Europe, Australia & NZ. This is up from 141 in October last year.

The company is planning an initial public offering in the US which it expects to occur before the end of the year. The funding would allow Alta to capitalise on their opportunity as a first mover to become the only listed company in the US that services what is considered one of the world’s fastest growing sports and fitness categories.

It doesn’t matter who you are or where you are in the world, if you want to go to a local martial arts gym as a once off, sign up for 3 times a week, or commit to an immersive 20 week program – Alta is working tirelessly to make sure they have a gym near you.

Their cutting-edge programs created by John Kavanagh, coach to global superstar and two division UFC Champion Conor McGregor, and have already been used by over 14,000 people. There are 39,000 martial arts gyms in the US alone, and it is estimated that there are well over 100,000 martial arts gyms throughout the world.

Image: Alta training session

Alta’s market opportunity

Most MMA gyms are individually owned, with very few franchise models. Alta believes that the market currently has minimal online presence, inconsistent programs and infrastructure that is being underutilised. It is here that Alta delivers value to these gyms, providing them with a refined consumer friendly program, instructor training, secure payment processing and most importantly, new customers and revenues.

MMA is considered one of the world’s fastest-growing sports in financial terms, and lays claim to the globe’s third-largest fan base of around 650 million people. The UFC has experienced rapid growth, and was estimated to be generating over US$1 billion revenue in 2021.

Alta estimates that more than US$10 billion was spent on training for combat sports in 2022, and they have also partnered with two division UFC champion Daniel Cormier, prominent UFC champion coach Eugene Bareman and former elite MMA athlete Laura Sanko.

Their newly developed tech stack enables Alta to track and optimise participant acquisition from all channels. There are a variety of systems fully integrated into the platform which add value to gym owners who just want to focus on transforming the lives of members through training and tuition. These features include payment processing, CRM, content management, commerce engines and member management and engagement.

 

Image: Alta. First mover advantage

An important part of how the company will drive customer engagement is through their high-quality content on the Alta platform, which allows users to have an ‘In-Gym’ experience at home. To make sure this is as authentic as possible, they have recruited the biggest names in MMA to film video lessons.

Daniel Cormier will be exclusively making content in a Centr App styled operation. Centr was acquired in a combined deal worth US$200 million, after reaching the 200,000 subscriber amount.

Scalable and capital-light business model

The company operates a highly scalable model with low capex requirements. One of their greatest advantages is they don’t take any risk in setting up a premises, drastically reducing the possibility of an F45 style implosion. Alta prefers to refer to themselves as the ClassPass of MMA – a company that has been valued at over US$1 billion and was acquired by Mindbody in October 2021.

Alta provides consumers with an open-ended subscription model, where every time a sale is made, no program end date is established. Their ‘Alta Membership’ provides access to regular classes at your local MMA gym but without any longer-term commitment.

The company also offers its signature 20-week program, and it has a reputation for making a positive impact on participants. In fact Alta has mentioned that almost 150 people have tattooed the company logo on their body after completing the program, a testament to the huge customer evangelism the brand has created. They also offer a 10-week and 5-week program. Again, there are no long term commitments.

Their scalability is expected to be in full swing under their new partnership with UFC Fit gyms, which have agreed to exclusively run Alta’s programs across their existing 200 global locations. On top of this, there are an additional 800 UFC Fit gyms in development.

Image: Alta. Iconic partnerships

Management experience and backers

Alta has a seasoned management team leading the company. Founder and CEO Nick Langton spent over two decades as a financial services operative, leading private wealth at Perpetual.

Their list of backers is a who’s who of Australian investing. On the ultra high net worth individual side, this includes former Goldman Sachs managing director Chris Champion, Barrenjoey founding partner Sean Larcombe, Origin Energy CEO Frank Calabria, former Foxtel CEO Richard Freudenstein, former Perpetual and MLC CEO Geoff Lloyd and Wizard and Yellow Brick Road founder, Mark Bouris.

On the institutional side, prominent investors include Lucerne Investment Partners, NewsCorp, Shaw & Partners, Apex Capital, VP Capital, Sentor Investments, and the Smorgon Family’s Sandbar Investments.

Reach Markets have been engaged by Alta Global Group Ltd including managing this offer and may receive fees for its services.

Past performance is not a reliable indicator of future performance.

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