VCMO #1 Bandit. Series A

From Bandit

Mission: Evolve Running

Launched in September 2022, Bandit is a next-generation performance and lifestyle apparel brand for the running world. Combining a rapidly scaling community of runners with limited edition product releases, Bandit has become the most engaging and sought-after new brand in the category.

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TL:DR - BANDIT (Series A)

• _{Prediction: $50M ARR, 21k+ members (~4% US marathon market share) over 3 yrs}

• _{Playbook: Omni channel (DTC primary) + well executed community retail stack with a proven team of former Nike, Bandier, Ideo, Ralph Lauren, Jet.com, Walmart, etc.}

• _{Cofounded by Nick West (first business hire at Jet.com) and Tim West (early hire at jet.com → built #1 Android store app)}

• _{More than doubled in membership count (annual recurring loyalty program) in first 8 months}

• _{Comps: Gym Shark, Nobull, Lululemon ($1.45B valuation → $605.3M ARR) 65% margin (2.4x valuation multiple)}

Value Drivers

1. Community Marketing /+

There are currently 500,000 marathoners in the US alone, which represents a sizable market segment of amateur runners within the running category. This rapidly growing segment spends upwards of 6-10 hours per week training without monetary or brand sponsorship to perform at their highest level.

According to Strava, 2021 saw 37 percent growth (on top of massive growth in 2020), of athletes joining run clubs, and more than 189,000 new clubs were formed. This demand for community is translating to consumers, where runners are seeking for brands that can provide community, and a sense of belonging to a home team.

Similar to the rise of Patagonia through epic story telling, the next big brands will win by building epic communities.

While Nike established their market dominance with elite athletes, Bandit is building their stack on top of a fanatic community. They test products with everyday athletes, community leaders, and amateur runners, offering highly technical racing and training gear first through their membership program, and then to the masses.

Community-first is not a new concept. And brands such as Lululemon (Yoga), NOBULL (Crossfit), and Gymshark (Lifting) have successfully leveraged this strategy to reach up to billions in valuation.

Since launching in September of 2022, Bandit has more than doubled their membership count, and seen tremendous growth in Annual Run-Rate.

2. Access to Performance /+

Distance and endurance sport apparel is often highly technical, requiring specialized designs, from fabric, cut, lining, to the pockets for fuel and hydration. Consumer facing access to quality performance gear not only drives purchases and retention, it trickles down to peripheral products as customers develop brand affinity and view themselves as part of the ecosystem.

This is highly advantageous for brands as everyday athletes, season after season, would only wear a race kit once or twice, as a result driving repeat purchases. And in between races, training gear and lifestyle offerings fill in the gap for every day needs.

While technical apparel is not exclusive to Bandit, their ability to combine controlled access with a community first strategy further fortifies their positioning.

Unfair Advantage /+

Converting a community into sustainable sales is highly challenging.

Bandit was founded by Tim West (Chief Creative Officer), and his brother Nick West (Co-founder, CEO). Both were early hires at Jet.com, working closely with Marc Lore through its $3.3B acquisition by Walmart.

Together they put together a world-class team at Bandit in omni-channel retail, fashion, and running from Nike, Bandier, Ideo, Ralph Lauren, and Walmart. They built a community retail platform with sustained growth to become the most sought-after new brand in the running category, and leveraged their advantage of not being a shoe company, to build strategic partnerships and collaborations such as Hoka and Asics.

With Asics, they’ve just entered a 2-year partnership which kicked off with the launch of “The Program” – a live and virtual marathon training program.

Challenges

Moving forward, Bandit’s challenge will be whether they can scale their community retail strategy, effectively and beyond its primary base of New York City to reach the likes of Lululemon.

They would need to evolve and adapt their playbook over time, localizing community efforts at cost, while maintaining a consistent brand voice on a global stage.

Managing, adapting, and segmenting its entire community stack will be the key to scaling to $100M in valuation and beyond 🚀.

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