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Hey everyone, Julian & Cesc here,
and today we're talking with
Sunrise Padel Capital, uh, Santi.
Uh, Diego, welcome to the channel.
Thank you.
Uh, tell us all about it.
We're super excited about this.
Tell us about, a little bit about
your background First and Padel,
how you got introduced to Padel,
and how you got playing Padel and
going into the business aspect of it.
Yeah, thanks for, for
having us and hosting us.
Um, I'll start with my background
and then also introduce himself.
Uh, you know, we both come from, from
tennis and grew up playing tennis.
Uh, we both play, you know, college
tennis division one in the us and.
You know, being from, from Mexico
originally, I always been around Padel
You always seeing, growing up in the clubs
and you know, in apartments and stuff,
but never got really into it, right?
I was always focused on tennis.
And then about five years ago, uh,
right before the pandemic, when you
still able to, uh, just show up and
play in a, in a club without having
to book a week in advance, uh, and
then start taking it a little more
serious, like getting really into it in
the last, you know, four years or so.
Uh, more on the playing side and
then on the business side, my back.
So, so before going into that, you,
you've, you've played tennis when you've
seen it in Mexico, but you never played
it, you kind of played more tennis.
Correct.
At what point did you kind of
transition say, Hey, uh, I want
to try Padel and I love Padel.
So after college, uh, I went back
home to Mexico for a couple years and
that's when I was a little burn from
tennis and I started just playing
more Padel just because Oh, gotcha.
A lot of friends, they were
already starting to play there.
Um, all majority of them
also like ex tennis players.
So that's when I really start, um,
you know, picking it up before moving,
uh, to Miami about six years ago.
And at what point did you decide,
hey, uh, I want to try to create a
business out, or, or, or create a fund.
That's what you guys do, right?
Yeah.
So, um, well, about something.
Tell us a little bit
about your background.
Yeah.
You've known each other
for quite a few years.
I know you're, you are.
You were an excellent tennis player.
Similar background in Diego or how's that?
Yeah, very similar.
So I think many tennis players
like us relate to this.
We, we played competitively
for many years.
We went to college, played division one,
and then after that you can, in that
transition period where you know, there's,
that don't decide to go pro, they get a
job and then it's very hard to get out
on the court as many hours as it used to.
And so naturally you see your
levels starting to go down and
it gets a little frustrating.
Uh, and then to me, I started
playing padel and it, and then it's
been around, it's a lot of fun.
And then the opposite started to happen.
My, my padel level started rising.
So then at some point I was getting
frustrated on the tennis court and I was
having so much fun on the Padel court
that it's been probably four years since
I haven't touched the tennis racket.
And.
You know, pa that's been such a big
important part of my life now that now
we're in business, so, and how was that?
Okay.
You guys fell in love with Padel.
What?
Have a cup of coffee.
Hey, let's create a
Padel investment fund.
Or how does that work?
How did you guys, how
did you guys transition?
How'd you guys meet?
Oh, we know each other since like,
oh, probably seven years old.
Okay.
Okay.
Um, just, you know, playing
competitive, growing up like tennis
in Mexico, we knew each other.
Um.
And, you know, probably about three years
ago we, we got together, we're playing,
you know, three or four times a week.
We started seeing this trend
where, you know, there's new clubs
opening the demands, picking,
picking up in, in, in Miami?
Yeah.
Okay.
And originally we gonna open our own club
in, in Southern Rice, uh, close to soccer.
Okay.
Uh, so we went through the
process of r raising the capital,
um, you know, negotiating the
lease, having the lease signed.
And at some point we, we was moving
forward and we started slowing down
with the permits just because it was in
a corporate campus, uh, very specific
type of use and zoning that we got to
the point where there was a path forward
and eventually we were able to get the
approval, but it was probably gonna take,
you know, six months to an extra year.
So at that point we decide like.
In the meantime, we were also doing
some angel investments in the industry.
Okay.
So we, you know, invested in, in
the pat in Toronto, the first part
club in, in, in Toronto, in Canada.
So your own money pretty much.
Yeah.
So we, we started doing some, some
investment in the industry with our own
personal capital, um, also with Rappa.
And we just started finding additional
opportunities and also saw this gap where.
People wanted to get involved in exposure
and the growth panel, but what they
necessarily didn't know how, right?
Because they didn't know the, you
know, the operators or the future
founders or also there were.
Yeah.
You know, a little worry about not
diversifying enough in the grow, right?
If putting all their money just in one
club versus putting a portfolio of clubs.
So that was one of the reasons we
decided to switch the, the model at
some point where, uh, we saw that that
potential and also talking to a lot
of different founders that they wanna
open clubs, uh, we see it more as a.
Like a venture investment where we're
not only are your, your friends and
family that provide the capital, we
work very close with the management
teams to give them that advising.
And we do re require them like a board
seats to Oh, to be active investors.
So it's more like a lead than a passive.
Correct.
Yeah.
Gotcha.
Yeah, we're very much involved.
Um, we're trying to fill the gap from
both sides, from, you know, we almost,
we were gonna operate a club so we
can see it from that point of view.
Another one under the investment side.
We can also see it from this side.
So we're trying to close the gap
because we still see that it's so new
that many people that are trying to
put a club, they still don't know the
in and outs of either the, the Patel
side or the business side of, of both.
Right.
Um, and then from the investor
side, you know, it's one thing when
it's friends and family and it's
your club, but now when you have.
You know, uh, institutional
investors mm-hmm.
Or you're bringing money
from outside into clubs.
It has to become a little bit
more professional than your
friends and family investment.
So we do require some type of governance
in the clubs, which is a board structure.
Mm-hmm.
Some type of dividend policies.
Another small but very important clause.
So now do you guys help,
uh, companies do that?
Absolutely.
Absolutely.
Um, so it's, it's part of our
investment thesis to have these
things, uh, lined up for the clubs.
We, without them, we, we heart are
a little bit tired and we might not
be able to invest because that's
how we approach our investors.
These are the certain things that we.
Require those clubs and um, you know,
many times it doesn't work out because
the club has a different vision of
what they want to do and it's okay.
Um, but a lot of the times what we've
seen is there's a lot of good founders
that are, that are there trying to
listen, trying to understand, uh,
from both sides of the perspective,
from an investor and from a founder.
And they wanna work with you and they
wanna work together and do the first club.
You know, some people.
Focus on motion club two,
three, and four and five before
they even do the first one.
Yeah.
And so we, we try to
bring them back to earth.
Let's open the first one.
It, it's hard 'cause it takes,
people think it might take six,
eight months to open one club, but
it takes over a year, maybe two.
So let's just focus on the first one,
get that one done right, and then we
can talk about club two, three, and
four with other valuations that, okay.
So let's talk about the basics and see
where you guys come in at, you know.
At the beginning, you have probably some
pre-seed money, you know, from friends
and family, as you guys talked about.
They're opening up the club
and they have it going.
At, at what point do you guys come in?
Are you guys kind of like, uh, series a b?
Are you guys, you know, kind of seed
money itself, not pre-seed seed money?
Where do you guys kind of come in?
What do you guys look for?
How do you qualify a a, an investment,
you know, to decide I'm gonna deploy here?
And you guys already mentioned that
you're more of a lead, you know,
investor versus a passive one.
Can you tell our audience the
difference between those two?
Yeah, those are great questions.
Um, so David, you can
answer the first one.
I'll tackle the sentence.
Yeah.
Um, regarding, you know, we get
involved at the stage, uh, there are
seed investments, so we look at some
expansion opportunities of the current
clubs are open and looking to expand.
But on the valuation side, as an
investor doesn't make too much sense.
Mm-hmm.
Um, obviously there's less risk.
Now there's a club established
and they went up in two and three.
But we saw there's a big impact
that we can have with the future
clubs, like operators coming
in at the seed investment.
Also, biggest return for, for our capital.
And we typically get, we deploy
the capital once they're a little
more advanced in the process.
Uh, obviously there's some, you know,
they need the money to move forward,
certain, you know, milestones of
the project, like signing the lease
and starting construction, all that.
So we typically like to see, uh,
always like they found allocation.
Uh, they have like at least an LOI
sign, uh, for the, for the land.
Um, and then we can work towards
like the next steps when they're
signing the lease, when they
make capital and stuff like that.
But they need, they need to have
already some sort of a structure in
place and some milestones, you know.
Be able to reach some milestones
before we deploy the gap.
Oh, okay.
So kind of almost like
almost a seed investment.
Almost like an investment, not
really a series A or B. No.
So actually, so what we've noticed
when it comes to series A or bs,
now you're talking about some
valuations that it's, it's what we
call future cash flows or multiples
of clubs that have not been opened.
Yeah.
So they'll use their one club that
they like, Padel House, or some big
brands that have one or two clubs.
They'll sell you 15 clubs about
to open and then the risk becomes
a little too large for us and
just the ROI is not there for us.
Gotcha.
At this moment.
And how many crazy valuations have
you find out or Probably a lot.
That's, that's one of
the key factors, right?
Are you going back to your
question of like what you guys
look for in a club to invest.
Uh, typically it's like six stuff,
uh, six things that we look at.
Yeah.
That, that's a, that's another one.
Very important.
What do you look for in a club?
What qualifies them for you to say,
yeah, I'm gonna deploy that money?
One important aspect is the financials.
Right.
Okay.
Uh, going back to the valuations,
um, you know, we don't invest
based on future cash flows.
Okay.
Or multiples.
Right.
Typically, the valuation is.
What's gonna be the cost to open the club.
Okay.
And then that's your relation.
I'm okay.
If you, as a founder, it's
fair that you should get some
founder shares for, you know.
Finding the space, uh, doing some
of the leg work before to open
the club, be able to run it, uh,
that that's totally fine, right?
Uh, we typically see like a
healthy mix of like an 80 20.
So 20% founder shares, 80% gets
raised by third party capital.
And additionally, we
do like that investor.
They have some, sorry, the founders.
They have skin the game and they buy
some of the, some of the equity as well
as the same valuation as anybody else.
Um, so obviously the
financial is very important.
Looking at the revenue per square
feet, looking at the ramp ups, um,
is not fair to assume that once you
open, you're gonna have 50% occupancy,
you know, the first month or 60%.
Right?
Uh, typical we like to see healthy
ramp ups starting, you know, 30%, 35.
Um, and then, um, obviously.
You know, the margins of
what is the breakeven point.
We feel more confident if
it's usually less than 30%.
Um, more than 30% of
occupancy for breakeven.
Um, I think long term, um, we'll
start seeing some clubs struggle
once there's additional competition.
And you know, right now there's
400 clo, 400 courts in the US in
Miami winter's like 10,000 Right.
By 2030.
I know.
So the margins are gonna get very
tight for some people that are rushing
to open a club as soon as possible
and signing very expensive places.
Yeah, that's the biggest thing I see.
The real estate, I think in addition.
There's other things that we look into.
Obviously the founders of the teams that
will be behind the project and working it.
Um, you have people that are
willing to work and listen to you.
Um, so those are the ones that we
keep having those conversations.
We have other people that they
just have one vision and they
wanna just do that their own way.
We let them do that one.
We don't, we don't get too much involved
because if you're not willing to listen
and, and try to learn, especially
something so new and that you haven't done
before, it's, it's a very important piece.
Now, uh, what do you
guys bring to the table?
Like, so you guys, you know, the
investment, but also the lead.
What do you guys bring?
Did you guys have a model, a
structure that you want, you
wanna apply in your investments?
What do you guys bring to the table?
Yeah.
Um, yeah, good, good, good question.
So, you know, as Diego mentioned, so
we have a, a background in tennis.
So we grew up in tennis clubs
throughout our lives, and now we've
transitioned into Padel for the
last four or five years I think.
Um, and then both me and Diego
and every single one of our
partners, it's five of us.
We all have backgrounds in corporate
America, so we believe we're one of the
fewer groups out there that can have both,
uh, the Padel tennis experience of running
a club, all but also the corporate America
infrastructure and corporate governance of
how a company in the Fortune 500 is run.
So we can marry those two and bring it
to the clubs on, and then that's how we
solve helping on the government side,
but also on the Patel experience side.
Gotcha.
And we have, uh, additionally,
like also some advisors that are
very in depth in the industry.
Okay.
Uh, that we can talk more about.
We, um, you know, we have a very strict
due diligence process where we look at the
financials, we give them feedback and say
like, Hey, I think your, this assumption
is wrong because this and this and this.
Because what we've seen with other clubs,
we look at obviously the infrastructure,
the demographics of the area, like
there's a good, you know, household
income in the 1, 3, 5 miles running area.
What's the necessity of the community?
Are there any other, uh, sporting
facilities in, you know, 1, 2, 3
miles, uh, surrounding the club?
We look at the infrastructure, um, make
sure that always is, uh, the right ceiling
heights, uh, the minimum that we want
the in office space into the columns.
Um, we, we like in new markets,
clubs that they have para pickable,
so you can use the pickable crowd
to start educate them about Padel
once you bring them into the club.
Now, do you expect that person already
to do all that diligence or is that
something you guys work with them?
Or how, how, how does,
how would that work?
Or could go either way.
So we, we work, uh,
Google either way, right?
So there's some price that are
more advanced and they don't
necessarily need all our help, right?
To give some example, some other ones.
We have people already in different
markets looking for, um, for places to,
to open a club and we help them with.
You know, putting together, um, you
know, looking at Lois, looking at lease
agreements, putting together how to
structure the business because that's
something that we get asked a lot.
Mm. Um, you know, how much, uh,
you know, should I, how much I put
on capital, but how much investors
have had valuation and, uh, looking
at the financials and, and also we
help 'em avoid some of the pitfalls.
Yeah.
So we've heard.
Some of our, the, the clubs, the founders
that they're in the very, very low stage.
Not a place where we are gonna invest
capital, but very, very low stage.
And, you know, uh, companies or agencies
are reaching out to them, Hey, you need
to spend, you know, 30,000 in a marketing
plan and logos and power palette.
And then we can go back and say, don't you
know right now you need to find a lease.
You need to find a place
and focus on these things.
We try to.
You know, not bec not only, we
don't just help the clubs that
we're investing in in our pipeline.
There's founders that are before
that and we try to help 'em and
guide them, and eventually, if they
get to a position where now we feel
comfortable, we'll invest into the club.
How, how much knowledge do you think
there is after all these homework
that you do in, in the market?
How much knowledge, meaning people
that know what they're doing and people
don't have a clue what they're doing.
Is it a 50 $50 million question?
No, people dunno what they're
doing, I gotta tell you.
Yeah.
Uh, it's interesting, right, because,
uh, we, well the last six months we
have talked to more than 30 to like
50 different founders that they wanna
from all over there, the place, right?
They wanna move to the us.
A lot of people from Europe wanna
move to the US to open a club.
People from Mexico as well,
people from Argentina.
Yeah.
Um, and everybody has a
different set of skills.
Um, you know, I would say in our
portfolio of, of fund one, we have
probably more than half of the founders.
They don't come from a
title tennis background.
Right.
They're being very successful
on the business side.
The, which is good, right.
But then also they need help on the, on,
on how to run a club and the pilot side.
Right.
So that's, it could be the opposite.
It could be the operator.
Operator, but business wise mm-hmm.
It could be the opposite.
So, um, it's, yeah.
Would you say it's that the
big majority compared to.
Because being such a new sport,
I mean, is that a big majority?
They know they're very successful
in what they do in their lives
in the financial part, but they
don't have a clue about right now.
And also what's more important
to you working with somebody who
is a good operator or somebody
who's a good business person.
I. I think, I think it's
a That's tough one, huh?
It's a tough one because you guys,
we might have different opinions.
You guys could do the business
stuff and he's the operator.
He knows what he's doing.
I mean, that, well, the, the problem
is I'm not gonna be there 24 7, right?
Yeah.
So if it was my club, then yes.
But you know, we have 7, 6,
7 clubs in the portfolio.
I do like when they're
good in the business side.
Okay.
Because it's people that you
can teach how to do the Patel.
Yeah, I'm not, I'm not exactly
saying you go and do the lessons,
you hire somebody to do that, right?
Right.
But you can run a team, you can
run a payroll, you can run a
forecast, you can manage expenses.
So I think the, the best, the number
side is right now, to me, the more
important piece because we, I feel
between me and Diego, we and our advisors.
We can help a lot on the
Patel side of the business.
Gotcha.
So, uh, I, I think the same, I mean,
I completely agree with Santiago.
I think, um, for us, it makes us
feel more comfortable when they've
been successful on the business side.
Um, just because it really
helps a lot with the governance
of the club and the, you know,
professionalism of running a part club.
Right.
Um, we see like two important
like key persons in a club.
Obviously the head pro
and the general manager.
Yeah.
Which at the general manager, they
can do like a really good job.
Right.
But we don't expect them to be teaching.
Battle and running programming and all
that, because that's not their expertise.
Right.
That's another key hiring that
we can help them find the right
people that has those skills that,
that can fit that criteria, right?
So, um, that's something that, yeah,
we, we we're very surprised with
how open the, the, the founders
are to like, working with us and.
Um, you know, coachable and
they most important, like, they
don't know what they don't know.
Right.
And that's, yeah, that's when
they look for help the humbleness
that they know what they want.
Yeah.
So let's, let's talk
about your, your, this.
You, you just mentioned six,
seven clubs that you have.
Uh, where are they, how big are they?
And on average, how much
money did you deploy?
Yeah, we typically, our fund mandate
is about 10% to 40% of equity.
Um, what we found out
is a lot of the clubs.
You know, they're not having
a hard time raising money when
they're at a certain point.
So when we get there, they, they
don't have as much with the remaining.
Mm-hmm.
And we do have to negotiate with
them because if it's too little,
then it's not worth for us.
But usually between 10 to
40%, we have about six clubs.
We're in conversation
with a seven right now.
Um, we're, we're in LA as a, one of the
first locations in la, downtown la Wow.
It's called Portes.
Wow.
I was very excited about that one.
Um, four courts outdoors, great weather.
In LA you don't necessarily
need to go indoors.
We're talking to Chicago, uh, with
Union Padel in downtown Chicago.
It's the first club in downtown Chicago.
Wow.
Great.
So that's indoors.
That's a great facility.
How, how many courts in there?
Five courts.
Five courts in, I'm
30, 32 Ceiling heights.
Wow.
30 high.
Great.
Amazing location in the West Loop.
So yeah, Chicago One club opened
in Chicago a couple years ago.
It's taking a little bit to ramp
up, but now there's an influx.
I think there's four or five close
opening in the next six months.
So Chicago is one of the
cities where I think.
It's gonna be similar to
what happened in New York.
Once a few open, it's gonna explode.
Yeah.
And we have New Jersey.
We're conversations with
the club in Manhattan.
We are conversations with the club
here in Miami in a different area.
Right now I feel like Miami is
consolidated to one area in the, yeah.
Yeah.
Can you divulge where,
what part of Miami is that?
Uh, north.
Southwest East, I heard
it's in a great area, man.
It's in a great area.
We're not, we're not allowed to say now.
There's gonna be an
announcement in a month.
Good.
It's in a great location where
it's, it's actually needed.
Okay.
You know, a lot of people from,
from the Gables, pancreas, coconut
Grove, they need to travel long
ways to play in, whether it's Palate
Lake in, in downtown or or Ultra.
Um, so we're gonna facilitate a club
for those people that live in that.
Nice.
How many courts.
5, 5, 5 courts outdoors.
Um, they're gonna be
hurricane proof, so Wow.
It's gonna be one of, of the first ones.
Wow.
So you already mentioned three.
Forres.
California.
Chicago, Miami.
Uh, four more to go.
We have New Jersey.
Oh.
In New Jersey we have Manhattan.
Manhattan.
We just, uh, they, so Manhattan
actual in on the island.
Yes.
Yeah.
Wow.
That's super excited.
You're gonna be competing
with a big, big, big dog bear.
Yeah.
So, no.
So it, it's a different vision, right?
The, the, the vision which we like.
Uh, these, these founders, they wanna
democratize Padel in Manhattan, right?
So they're not gonna go in and compete
against a Padel house or reserve.
Um, so what are they gonna do it for free?
No, but you know, it won't be like
your complete experience where you, you
know, network and have this wellness
area, or it's just like, Hey, you go
play Padel, you hang out a little bit.
Good facilities for Padel, but
they're gonna try to be more
competitive to get more people
into, into the sport in the city.
So it's gonna be cheaper.
Sort of like a central park tennis court.
I'm not gonna say cheaper, I'm
gonna say reasonable reason.
What's happening in New
York is a little bit Yeah.
Out of range for many.
Um, and then we're, um, and just to wrap
up the, the portfolio we have, um, I think
we haven't mentioned Denver, that we're
in the talks, uh, where club in Denver.
Colorado.
In Colorado.
Okay.
Wow.
Um, and, and lastly took
Arizona and Tux, Arizona.
Which reopen They opened yesterday.
That's Charles, right?
That's the Padel.
Charles The pad?
Yeah, the pad.
The pad.
Amazing club.
Really?
How many, how many courts?
So they have nine pickleball
and then seven Padel.
Wow.
Indoors big.
And the, yeah, it, it is big.
The space is, uh, over
40,000 square feet indoors.
Uh, really good ceiling heights.
And the idea is to, you know, we'll
see how apparently now Arizona
is becoming also a hub of Padel.
There's like three different
projects in, in, um, in Phoenix.
Uh, there's another one
in oh two in in Tucson.
Um.
Yeah.
But yeah, we'll, we'll see how, how the
demand is, and then we can adjust and
remove some pickleball cord animal Padel.
I, I love that.
I mean, I love, I love to hear that.
And, and we're always happy to hear
that collapse opening everywhere.
What do you think about the hybrid
concept, uh, Padel and pickleball?
I mean, does it make sense for
you, for your investment portfolio?
It does.
It does.
I mean, it the city, right in the market.
If you tell me Miami, I'll tell
you no, go all in on Padel.
Right.
There's no need for, for
getting to pickable here.
Um, we do like in new markets,
like in Arizona to, you know,
lower a bit the risk and, you know,
we need to fill the club, right?
Yeah.
With some people to like
educate 'em about Padel.
So yeah, having, you know, a good indoor
facility of people will help bring
that, those, that crowd and then, you
know, slowly convert them to, to Padel.
Okay.
So it really depends on, on, on
the market, but I don't see it
that they should be like a. Uh,
competition between the two and
they can coexist in Oh, for sure.
In circum, even though with tennis too.
I think it's, it's, it's a great trifecta.
Is just beautiful.
Yeah.
Tennis pick of one panel.
Okay, so let's talk about the other
side, uh, raising capital, right?
How much capital have you raised
and are you still looking for, uh,
you know, still raising capital?
Yeah, so we have raised, uh, around 1.8.
Um, we're actually closing
this month, uh, this week.
Uh, we'll probably be finishing around
two, maybe a little bit over two, just
depends on how these final conversations
go and if part smashes an investor or not.
I'm just kidding.
Yeah, could, could be.
You know, um, what, what's your goal?
What are you guys looking?
Uh, we are past our initial goal.
Our initial goal was around, you
know, 1.5, 1.6, just to give us.
Uh, decent amount of equity in these
initial clubs that we identified
that we wanted to, to invest.
How much did you guys deploy?
So we have deployed
about 30% of the capital.
Okay.
Uh, the next of the deployments
are happening, uh, in February.
Okay.
So that's, uh, that's why we raised,
uh, finishing the, raising the, the
fund this month so we can finalize all
the deployments that we need to do.
Uh, next month's.
Are you, will, are you open to invest in
more clubs in 2025 or what, what's your
vision for, for the rest of the year?
Yeah, I think the, the opportunities keep
popping up left and right, do and Diego,
like, if something falls off, don't worry.
There's like five more coming along.
Well, lemme tell you, after these
podcasts, you're gonna get the
phone ringing quite often, so you
better get, that's why we're here.
I hope so.
For both sides.
For both sides capital and also people
will looking to open up gloves for sure.
Yeah.
And, and, and so what we've learned is,
um, it's still very new for many type
of investors, specifically institutional
investors that have, you know, your
family offices or even private equity.
Um, it's very new business and
they, they, the ticket right
now is, is a little bit small.
Each club requires a
lot of work and effort.
So what we're trying to do for fund number
two is try to expand on the success of
fund one and expand the scope of the fund.
So not just invest on new clubs, but
also add a little bit of real estate.
Maybe you can own the land
where the club is sitting.
Um, maybe you can expand into technology
with, you know, world Padel rating
or, or play by point or those.
So fund two is gonna be very interesting.
The idea of Fund one was to prove to
investors that there is a business
to be made on Padel, even though
they don't know much about it yet.
And, and I think we we're proving that
that is happening even though with
a portfolio of six or seven clubs.
But the idea for fund two is to.
Do more like a 10, $15 million raise too.
Wow, that's great.
That's, yeah, I would say a little bit.
Very ambitious.
Hopefully a little more than that.
That's good.
I like it.
But the thing is like, uh, we haven't
talked about this, but two of the
six clubs, uh, or seven clubs,
that depends on how we finalize it.
Um, they're buying the real estate
and as an investors we're also getting
exposed into the real estate acquisition.
And we'll use the cash flows
of the club to pay for, you
know, the debt and, you know.
That's such makes sense.
A smart move.
You know, and what we, uh, we
realized that in a lot of different
markets, long term is cheaper and,
you know, obviously more profitable
to buy the land than, you know, be
paying these very expensive leases.
Um.
Yeah.
So down the road, if you take it
to the cost of, you know, acquiring
to land and even do, even do
like a build to suit, oh yeah.
At the long term it is cheaper than,
you know, paying high expensive
premiums on, on, on the leases.
So I think that then for the next, uh,
that's, we wanna raise way more capital.
So we do, we'll do a mix of
real estate investments tied to.
You know, there's a property
company, an operating company, which
sometimes might be just invest in the
property company or investing both.
Right, right, right, right.
Um, and as pet's growing too,
um, there's gonna be more
opportunity, more, more capital.
There's gonna be more people
needing money and you're gonna
add the real estate aspect to it.
Yeah.
So you're looking for both, so to clarify,
investments on also new clubs, correct?
Correct.
Correct.
Yes.
Good.
So you're open for business full on.
Yeah.
So yeah, we, we, we haven't finalized
all the details yet, but I will say,
we'll probably a good mix of, you
know, 40% into the real estate, um,
40% into operating companies, and then
20% into, uh, things in the ecosystem
that add value across our portfolio.
40% in real estate.
Wow.
So that's okay.
You know.
When you look at, you know, what
happened, um, you know, here in the
club in Miami or the wine LA when we,
you know, part of the purchase of the
real estate, it just becomes really
attractive to investors as well.
Right?
Yeah.
You get exposure to boat.
Yeah.
Yeah.
Um, it's one thing investors, a lot of
investors know about real estate only.
That asset, it's collateral asset.
Yeah.
So as, as this becomes a more.
Uh, a, a support that
people know more about it.
I think this is one way to invite
investors to come over and try something.
So, so Santi and, and Diego.
So how do you see the growth of, of
Padel in the next, you know, five years
down the road here in the United States?
So, I mean, you, you're, you're
now, you're seeing the number to
start getting the smell of things.
What do you see it's going and
is it just USA or are you guys
investing all over the world?
So that's a good question because
we initially wanted to focus in
three markets that we identify.
There's a big opportunity.
It was uk, Canada, and us.
Interesting.
We look at 12 of our partners
actually live in London, um,
and we come across like seven
opportunities that we review in uk.
But the valuations, it already, it's
a little bit ahead of the US mm-hmm.
And, you know, there's a lot
of people throwing money at it.
And then the, the, all the clubs
that are, that are very expensive,
like valuations for investors.
So we decided to, um, shift a little
bit, only focus on us for now,
uh, for fund two, US and Canada.
We already have a few opportunities
that we're looking at in, in
Canada, but when we look at the
potential of the US is just.
It's, uh, it is huge, right?
Yeah.
If you compare to Spain, uh, okay.
Let's say, obviously Spain is the most
mature market of Padel, but you compare
where is US right now versus Spain?
You know, in US there's
about 400 courts today.
Yeah, right.
Um, Spain has 16,000 courts.
Yeah.
Look at the population, the size
of population in Spain versus us.
If you look at how many courts are per 1
million people in the US it's just one.
Yeah.
In Spain it's about
300 and, and something.
Yeah.
Right.
So.
You know, looking at the annual
grow rate over the last five years,
around 80%, well, you know, we
will have 15,000 courts by 2030.
And that's, if you just look
at the cos, that's almost like
a 4 billion market, right?
Yeah.
Well just for co like bookings.
Yeah.
Uh, we, we had a, I know in a previous
podcast, uh, uh, they, they were saying
that they already have orders for up to
a thousand Padel courts only for 2025.
As of February, you know what I mean?
It's growing, growing.
It's gonna be more and more.
It's gonna be more and more and more.
So we're gonna triple,
or you know, 400 cores.
Now we're gonna triple or quadruple,
you know, more clubs, more everything.
More coaches, more everything.
Yeah.
And the products.
Everything's gonna, and I think
this is where also investors
need to be a little bit careful.
'cause these things
will pop up everywhere.
Yeah.
And it's very easy.
Very easy to now be.
You know, persuaded to investing
in something because you're gonna
miss out on this opportunity, but
might Yeah, they're very bullish.
You know, I, we, we call it the gold
rush of Padel, you know what I mean?
Exactly.
That's what's going on right now.
But it's still at a very place where,
you know, you just have to check your
boxes and do your homework and the
opportunities are out there to be taken.
Yeah.
Especially, you know, big cities will,
will benefit the most, you know, we
see, we saw what happened in Miami.
We saw what happened in New York.
Yeah.
We were very, very bullish in,
you know, Chicago, obviously
LA and those big cities.
Yeah.
And then eventually the suburbs are gonna
become very attractive because still
millions of people live in suburbs and
you know, nobody, they don't wanna drive
an hour to go to the city to play Patels.
Yeah, right, right.
Exciting.
Well, yeah, if you look at how many,
you know, of all the 12 courts in the US
today, you know, 29% are in South Korea.
Yeah.
Right.
So if once you get outside
of here, there's still a lot.
And if you look at the rest, you know,
probably between Florida and Texas,
that's like 50% of the market today.
Yeah.
Yeah.
Right.
So there's, uh, still a lot of growth in,
in different markets, in, in different
regions that, you know, we're gonna start
seeing clubs, you know, popping up in
cities that you never thought before.
Like, you know, we will, you know?
Yeah.
Like now, you know, Kansas City is
like an area adopter Padel, right.
I thought about my stuck
home in Connecticut.
There's three already.
Yeah.
You know, it's like Jesus.
Aspen has one.
Courtney Aspen Court, Vermont has one.
Can you believe that they played the snow?
The snow in the snow?
Snow.
I played there in the snow.
So it proves the concept that people want
to come out and play the sport and people
are willing to pay $30, $40, I mean, up
to, you know, $8,000 to come and play.
Of course.
Yeah.
Well, thank you so much guys.
I think it's, it's super exciting to, for
you guys to be in this beautiful journey.
Yeah.
Uh, congratulate you guys.
Congratulations.
I wish you all the luck, man.
Thank you, you guys.
Thanks for having us.
Thank you.