Science in Sport is to rapidly scale its business in the United States having secured £15 million in fresh funding.
With eyes for the American Football market, the nutrition giant saw its shares rise by 3.6% in morning trading yesterday. It is reported that at least £2.8 million of the funding round will go toward the firm’s American Football charge, with a further £3.9 million dedicated to the infrastructure to make the move a reality and manage costs of market entry.
£14 million of the funding stems from institutional investors, while the additional £1 million is to be raised via an open offer.
It was just two years ago that the firm last whipped round for funding, raising £8.7 million. This, as discussed in an April CI.N interview with CEO Stephen Moon, has resulted in a doubling of already “strong online business” in 2016, followed by a “100% rise in Q1 trade online”.
Astonishingly, the firm gives away over 800,000 gels a year.
Moon said of this: “That’s actually one of the better bits of business we do. On the face of it must seem awful business, but we measure the returns closely. I won’t go into detail here, but if you think about it in terms of people logging on for free gels, they can either pay £3.99 postage, or add a few other bits to their basket to get free postage at a tenner. Owning our own factory is critical here in flexing this muscle against competitors. In theory our Nelson factory could produce £50 million worth of product in a year. Our gel machine has four lanes, one of which could service the rest of the gel industry’s needs. Therefore we don’t fret too much about giveaways, in particular as the customer retention rate is high.”
Italy too is on the radar of the business. Around £600,000 has been set aside to develop this market.
Of the latest funding round, CEO Stephen Moon said: “Science in Sport has quickly grown to become a leader in endurance sports nutrition for elite athletes, but our ambition is to capture a much bigger market share and to expand internationally beyond our now profitable core business.”
The sports nutrition market has seen some high profile acquisition activity, in particular by its closest competitors. Science in Sport itself has been subject to bids for its business, but says that it is committed for the long haul.