Is now the time to invest in pickleball?

EDITOR’S NOTE:

Heyyo! Welcome back to Pitch Reviews, the fusion of KingsCrowd’s Monday Memo and my Pitch Reviews newsletter. Each week we’ll share a chart of the week, a pitch review of an active deal, and a quick look at three other recently top-rated deals in the CF landscape.

Scott Kitun

CHART OF THE WEEK 📈

• KingsCrowd portfolio users are being more conservative this year than in prior years with online startup investments.

• Compared to January through July of 2022, total tracked investments in KingsCrowd portfolios are down $5,993,080.

• From January through July 2022, 6713 investments were tracked in KingsCrowd portfolios, compared to just 2658 in 2023.

• The average amount committed per investment also decreased by $268.

• These trends are consistent with general economic uncertainty and fear of entering a recession that permeated public sentiment throughout much of 2023

Demo Day: Join us for KingsCrowd’s inaugural pitch event!

When: Wednesday, August 23rd, 12pm ET/9amPT

Spotlighting the future of investing with pitches from Avadain, Build Club, and LegionM. Engage in our Q&A, then dive deep with a fireside chat hosted by CEO, Chris Lustrino. Don't miss out on the next big thing in our first-ever pitch competition!

PITCH REVIEW 💸

Brief: Pickleball Superstore is an online retailer for pickleball gear. It offers top-tier products, informative blog content, and a loyalty rewards program. It’s currently raising $250,000 at a valuation of $4.58M with a minimum investment of $100.

Key People: Three founders: CEO Steve Raack, Chairman of the Board Pat Rolfes, and Board Member Ted Angelo. All are pickleball players, leading the startup to profitability within two years of operating the venture. All three have held high-level positions outside the sporting goods industry at various firms. None of the founders appear to be full-time with the company, and there are no full-time employees. Despite the lack of commitment, the founders have executed well.

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Summary

Here's what we like: Pickleball Superstore has positioned itself as a go-to destination for pickleball enthusiasts, offering a wide range of high-quality products and a seamless e-commerce experience. The company's commitment to providing excellent customer service and quick shipping from its distribution warehouse sets it apart from competitors in the pickleball equipment market.

Pickleball is a rapidly growing sport with a strong and dedicated community of players. With the increasing popularity of the sport, the addressable market for pickleball equipment is expanding. Pickleball Superstore is well-positioned to capitalize on this market potential and establish itself as the leading digital destination for the pickleball community.

Despite being early, Pickleball Superstore has already achieved profitability, generating $401,134.89 in revenue in the most recent fiscal year. This demonstrates the company's ability to attract customers and drive sales. The company's annual revenue growth is expected to improve as it expands its customer base and product offerings.

Here's what we don't: Pickleball Superstore operates in a slightly competitive market with established players like Dick's Sporting Goods and Amazon. While the company aims to become the number one pickleball store in the world, it faces challenges in differentiating itself from its competitors and capturing a significant market share. With low barriers to entry, other players could easily replicate the business model and offer similar products, potentially eroding Pickleball Superstore's customer base.

Furthermore, without dedicated founders fully committed to driving the company's growth and success, it may struggle to overcome challenges and capitalize on opportunities. Investors should carefully consider the risks associated with a venture that lacks founder commitment. Finally, though the pickleball equipment market is growing at an impressive rate, it is very niche. At $518 million, there may be little upside for a company entering the market.

TOP-RATED DEALS 🌶️

AppMail

AppMail transforms regular emails into interactive experiences, allowing users to shop, schedule appointments, and more directly within their email. Integrated with Google and having collaborated with giants like LATAM Airlines, IAG, and ANA, AppMail is redefining email marketing.

• Valuation: $13 million

• Minimum Investment: $500

CODAworx

CODAworx is a unique marketplace that caters to public art projects, offering software tools, publications, services, and events that bridge businesses with seasoned artists. Beyond serving artists, CODAworx caters to a diverse clientele, including engineers, lighting firms, art consultants, real estate developers, and more.

• Valuation: $9.5 million

• Minimum Investment: $100

The Coven

The Coven is a coworking space laying the groundwork for physical and psychological prosperity. It offers space and spurs professional metamorphosis through workshops, digital and in-person coaching, and networking opportunities. Their offerings range from on-demand sessions to real-time workshops that bolster entrepreneurial growth, hone leadership acumen, and integrate DEI practices.

• Valuation: $12.5 million

• Minimum Investment: $100