Hyrox has been in the news a lot lately, and no, I’m not talking about one of the organization’s star athletes drawing criticism for continuing to compete in an event after defecating on herself. I’m talking about LVMH-backed private equity firm L Catterton’s $700 million purchase of a controlling stake in the company.
Born in 2017 out of a gym in Hamburg, Germany, Hyrox is one of the fastest-growing sports businesses I’ve ever seen. The format is simple: participants run 1 km eight times, with a different functional workout (sled pushes, rowing, burpees, wall balls) after each run. It’s a standardized race, so times are comparable globally because the event is the same whether it’s held in New York City or Singapore, and the average participant finishes the race in about 90 minutes.
The lightbulb moment came when Hyrox co-founders Christian Toetzke and Moritz Fürste realized that 52% of gym-goers in Germany called “fitness” their primary sport, yet fitness wasn’t actually a sport. It’s like everyone interested in golf could go to the driving range but never got to play a round.
So to solve this problem, Toetzke and Fürste created Hyrox. The first race in Hamburg only drew 650 participants on a €200,000 budget, but over 1.5 million people will compete in Hyrox events this year. The company makes money off everything from entry fees and sponsorships to equipment licensing and gym affiliation, and Hyrox says it will generate approximately $270 million in revenue this year. Even crazier, the company has never spent a single dollar on marketing.
Those are obviously impressive numbers, but you don’t read this newsletter for a press release. The better question is whether Hyrox is actually worth $700 million, and if it is, why is a private equity firm backed by LVMH interested in buying it?
Well, let’s dig into the numbers.
Read more
