Puttshack has big plans to double its U.S. footprint in the coming weeks, and thanks to a fresh infusion of $150 million in cash from its latest funding round, the company has the fuel it needs for even bigger growth in 2023.
The mini-golf brainchild of Topgolf founders Steve and Dave Jolliffe completed a growth capital funding round, led by BlackRock (BLK) and British private equity firm Promethean Investments.
Puttshack's website says that the company's Boston location was supposed to open over the summer. While it missed that deadline, just a day after the funding announcement the company announced that the Boston location will be opening this fall.
The company did not return a request for comment on whether it needed the new funds to open the Boston location, but it did acknowledge in its press release where the money will be going.
"This new capital from BlackRock will allow us to further expand and bring our one-of-a-kind concept to more cities across the country," Puttshack CFO Logan Powell said.
Puttshack describes itself as the world's first and only upscale tech-infused mini-golf experience.
There currently are only two locations in the U.S. (Atlanta and Oak Brook, outside of Chicago) and four in the U.K. But now the company plans to open the Boston location as well as a Miami location before the end of the year.
Puttshack locations are expected to open in Dallas, Denver, Houston, Nashville, Philly, Pittsburgh, and Scottsdale in 2023. The company also has plans to open a second Atlanta location.
"Puttshack is tapping into new markets with its innovative approach on the beloved game of mini-golf, making it the clear leader in the social entertainment industry," said William Im, director of BlackRock's Global Credit Opportunities team.
Golfing Resurgence
Puttshack is building off the popularity of Topgolf, which has experienced exponential growth in recent years.
Topgolf opened 74 facilities, including 67 in the U.S., at the start of 2022.
The last two years have been a rocket ride for the company after Callaway Golf reached an agreement to buy the rest of the company (it previously owned a 14% stake).
The natural tie-up benefits both companies as many credit Topgolf with a resurgence in interest in the sport of golf.
"Our research tells us that the approachable, non-intimidating environments of Topgolf, and venues like it, help to cultivate interest in the traditional game," said NGF President and Chief Executive Officer Joseph F. Beditz, according to NBCSports.
The National Golf Foundation reported in May 2021 that golf participation rose 8% in 2020 to 36.9 million when combining players who play on-course and off-course (at places like Topgolf).
Off-course only golfers accounted for 12.1 million people, compared to 12.6 million for on-course only golfers. The rest of the golfers played the game both on- and off-course.
"The demand in this space is compelling, and we are excited to support Puttshack in its rapid expansion. There is a positive outlook on the horizon with substantial growth for the company," Im said.
Puttshack Pushes Expansion
Puttshack opened its first locations in London in 2018. By the time Promethean Investments led a $60 million funding round in 2021, the company had opened three locations in its hometown.
"The investment round was oversubscribed, which speaks volumes of the strength of the concept and team. The demand for social entertainment, particularly as we emerge from the global pandemic, is extremely high, and Puttshack is set to grow at a rapid pace," said Michael Burt, Promethean managing partner, at the time.
Between 40% and 50% of Puttshack's revenue comes from its mini-golf games, a higher percentage than others in the "eatertainment" industry, according to a 2020 profile in industry trade paper Restaurant Business, with CEO Joe Vrankin pointing out that margins are higher on the game side.
