OC&C advised KKR on $450 million investment in Zwift

28 September 2020 Consultancy.uk 3 min. read

KKR has acquired US-based fitness company Zwift, with an investment that establishes the start-up as a ‘unicorn’. As often is the case at KKR, the private equity group received strategic advisory and commercial due diligence support from OC&C Strategy Consultants.

Eric Min, Zwift CEO and co-founder, remarked, “With this investment, Zwift is primed to operate in a broader fitness market and deliver on our ambition to provide gamified fitness through integrated software and hardware, to anyone who wants to have fun while getting fit at home. We will be accelerating our investment in the core business, improving the overall product experience, and bringing forward new features, more content and Zwift designed hardware, all with the support of KKR and our new outside investors who can help drive our growth.”

Launched in 2015, Zwift has since seen over 2.5 million accounts registered across 190 countries, positioning the firm as a global leader in the at-home connected fitness market. With the Covid-19 pandemic having consigned billions of people to their homes for the first half of 2020, Zwift’s prominence has increased significantly as many turned to the platform to provide not just a fitness solution but also a means to help them maintain their social connections by joining Zwift’s digital community, working out together online.

Zwift raises $450 million, achieves unicorn status

Stephen Shanley, Director at KKR, commented, “Zwift is the preeminent digital brand for the global cycling community with a best-in-class product that sits at the intersection of digital health, gaming and at-home fitness. We see tremendous potential ahead as Zwift invests further in its digital and physical products to enhance the experience for its global community of enthusiastic users. This investment fits perfectly with our growth equity strategy of backing leading tech entrepreneurs as they scale globally.”

Zwift joins the unicorn club

KKR’s investment has made Zwift a unicorn, as a start-up valued at over $1 billion. The $450 million in funding was contributed through the private equity house’s Next Generation Technology Growth Fund II, a global fund dedicated to growth equity investments in the technology space. Leading the consortium of investors, KKR relied on due diligence advice from OC&C Strategy Consultants throughout the deal-making process. During the process, OC&C’s team was led by Phil Hunt, Tom Charlick and Tom Gladstone.

Hunt said of the deal, “We are delighted to have supported KKR on this transaction, building on a long-standing relationship with one of the world’s premier private equity investors… We bring extensive experience in personal fitness, gaming and consumer internet to offer unique insight into this business. Our global presence allows us to draw on local insight to offer the best possible outcomes for private equity investors.”

OC&C is long standing commercial due diligence advisor of KKR. Notably in 2019, the consulting firm also aided KKR’s £1.7 billion IPO of Trainline. The move saw a group of Trainline investors, led by KKR as its biggest shareholder, completely cash out of the online rail bookings company, months after the group had one of this year’s most successful European initial public offerings. OC&C also assisted KKR with the 2020 acquisition of The Citation Group, a provider of HR and employment law services to SMEs.