New Zealand's Special Group will not be charging its usual rate for a global advertising campaign for startup Wimp 2 Warrior (W2W).
The ad agency will be taking equity in the exercise company, which takes its inspiration from mixed martial arts (MMA) training.
Special Group was among a number ofad agencies around the world, who pitched to work on the project.
After discussions with the founders of the company, Special Group saw enough potential to take the unusual step of putting skin in the game.
Special Group founder Tony Bradbourne wouldn't reveal how much equity the company was taking, but he did say that the agency would be waiving its usual services fee in working on the account.
The agency has been called on to rebrand the company and launch a new campaign that announces the revamped business in the United States, Canada, Ireland, United Kingdom, New Zealand and the United Arab Emirates.
"From our very first meeting we quickly realised as companies, we had closely aligned ambitions to create a real impact globally – and as an independent company we are always looking to back the brands we believe in by taking a stake in shared success," Bradbourne said.
MMA has grown in popularity in recent years off the back of the global UFC hype machine, which accumulated hundreds of millions of fans around the globe.
The W2W training was founded in 2012 by MMA coach Richie Cranny as a vehicle to introduce the benefits of MMA training to absolute beginners.
In 2017, financial services executive Nick Langton became co-founder and W2W has since attracted more investment.
It has also secured backing from News Corp's "Scale Up Media Fund" that supports promising Australian businesses, and unlocked a further $7.5 million in funding earlier this year from Sandbar Investments, Altor Capital, Shaw & Partners and Lucerne Investment Partners.
The W2W training programme is currently taught to more than 10,000 people around the world at various gyms and the aim is to further tap into the popularity of UFC to push this even further.
The company has recruited Conor McGregor's coach John Kavanagh, two division UFC Champion Daniel Cormier, British television presenter and ex-SAS member Ant Middleton, and ESPN and UFC broadcaster Laura Sanko as spokespeople to promote the benefits of the programme around the world.
W2W ambassadors John Kavanagh, Laura Sanko, Ant Middleton and Daniel Cormier. Photo / Supplied
But it hasn't been easy going over the last 18 months, with Covid-19 disruptions hitting the business hard.
"Our last financial year saw our global gym footprint operating at 12 per cent of capacity due to Covid shutdowns, despite this we recorded our highest revenue year on record, whilst also delivering a 60 per cent increase in our number of gym partners," W2W co-chief executive Angus Benbow told the Herald.
Co-founder Nick Langton earlier this year told online publication Startup Daily that the company would have hit eight-figure revenue in 2020 had it not been for the pandemic.
Benbow says the aim for the business is on growth rather than short-term P&L outcomes.
"Our current focus is on rapidly scaling our global operations and expanding our online community," he said.
"This means we invest ahead of growth, with significant confidence in the underlying profit drivers of the business, as the unit economics of each program we run is profitable to both our partner gyms and us."
Benbow told the Herald that he believes the business has the potential to expand into more than 2000 gyms around the world, allowing the company to recruit as many 200,000 participants a year.
Alongside this, he also has plans to sell merchandise and to start a virtual academy for those who would like to connect with the trainers online.
The exercise training space is lucrative, but it's also hugely competitive.
Before the pandemic, data from IHRSA report showed the global health club industry raked in around US$96.7 billion in 2019
As the pandemic hit, at least some of that revenue shifted to online services, with online brands like Alo Moves seeing a 300 per cent rise in engagement.
The online trend does seem likely to hang around, but exercises businesses will increasingly play in both the real world and digital space in the future.
Benbow has set an extremely ambitious target for the business to reach $1 billion in revenue by 2025.
"You have to remember that the MMA community is one of the last untapped sports markets in the world – it has a global fanbase of more than 575 million people," Benbow said.
"If we can attract just 0.3 per cent of this audience to take part in our in-gym programs, we will be able to fulfil our revenue ambitions."
The heat will now be on Special Group to ensure it builds a brand capable of attracting that level of interest.
