The Endurance Economy (Part 5) - Key Takeaways
Key learnings and insight from this five part series on the Endurance Race Industry.
For those of you reading for the first time, welcome to Sweat Ventures. I write every other week on themes that catch my eye in the world of Fitness and Sports Investing.
Introduction
I’ve been teasing this for months now, but I finally had the time to sit down and write the final part of this five-part series covering the Endurance Race Industry. As a reminder, Part 1 covered a general industry overview. Part 2 discussed m&a activity in endurance sport-focused companies. Part 3 highlighted early-stage activity, and finally, in Part 4, I looked at emerging professional leagues.
This final post summarizes some of the specific aspects of the industry that I’m most bullish on from an investment perspective and offers some closing thoughts as I wrap up this research.
Dirt Sports
When I look across the spectrum of endurance sports, the area that gets me most excited is what I’ve defined as “Dirt Sports," meaning sports that take place on unpaved trails. This includes Trail Running, Gravel Riding, Mountain Biking, and Rucking. I believe there is an investment opportunity within these sports that spans the entire company lifecycle from startup to major enterprise.
Across the board, we are seeing significant growth in these sports at the grassroots level. My hypothesis is that the COVID-19 pandemic accelerated the pre-existing growth trajectory of outdoor recreation, as fitness enthusiasts were forced to spend more time outside and maybe fell in love with a new sport in the process. In a recent interview with the Fitt Insider, AllTrails CEO Ron Schneidermann said that “we are on the cusp of a global reconnection with nature.” Unlike so many ephemeral trends that emerged during the pandemic (Peloton, NTFs), participation in outdoor recreational activities has enduring potential, and I believe we are still in the early innings of the commercialization efforts that will lead to investment potential.
No dirt sport highlights this growing interest more so than Trail Running. According to Running Insight and Run Repeat, Trail Running participation has grown 231% over the last 10 years and 2,394% over the last 20 years.
The growth in grassroots participation has led to growing interest at the professional level as well. There is a push to include trail running in the 2032 Olympic Games, and marquee events such as the UTMB World Series and the Western States 100 are attracting more media interest and prize payouts for winners.
In addition to trail running, other dirt sports, such as gravel riding, mountain biking, and rucking, are all growing rapidly. In Strava’s annual activity report, users logging gravel bike rides were up 48% in 2024, and mountain bike rides were up 13%. Rucking, i.e. hiking with a weighted vest, also has a growing following. GoRuck, the predominant gear supplier for the sport of Rucking, saw a 40% increase in sales in 2023. The club that I ruck with, The Austin Ruck Club, started by Ben Pfeffer and Patrick Johnson, has grown from just a few individuals on Thursday mornings to a group with more than 40 members in a short period of time.
In summary, I think we are still relatively early in the commercialization of these dirt sports. We will continue to see a demographic shift away from road-based activities toward trail-based sports. There will be investment opportunities in apparel, gear, technology, and events that cater to this market.
Functional Fitness Events
Some may see this as a stretch because it is not a “pure” endurance-based sport, but another category that I’m very bullish on is functional fitness-based events, which blend endurance with strength training elements. Obstacle course races were the early movers, with brands like Spartan and Tough Mudder being the most relevant. Alongside the growth of obstacle course races, CrossFit “gamified” its fitness system with the CrossFit Open and the CrossFit games.
Whereas obstacle course races are generally perceived as fun, one-off events to try something new, and CrossFit at times seems unattainable for the average person, where I’ve become more convinced of this category's potential is the emergence of Hyrox.
Hyrox markets itself as the World Series of Fitness Racing. The event was created in Europe as a more accessible version of the CrossFit-style games. It takes core elements of CrossFit and removes the complex Olympic-style lifting. It also standardizes the format across all events. The race consists of 8 different “stations,” with a 1KM run to break them up. The stations are rowing, ski erg, sled pull, sled push, wall balls, sandbag lunges, burpee broad jumps, and farmer’s carry.
Although I challenge Hyrox’s claim that their races are accessible to “everyone," I do think they have opened the functional fitness competition category to a much wider audience than its predecessors.
Since its launch in 2017, Hyrox events have taken place in over 30 cities and 11 countries. Total participation in 2024 was 425,000 people, and there are now over 5,000 Hyrox-affiliated gyms worldwide. Hyrox has developed its own professional circuit with a $150,000 prize purse and has secured partnerships with major brands, including Red Bull, Puma, and Centr.
High-Intensity Interval Training (HIIT), which is the closest approximation to the fitness “style” that Hyrox represents, is a $13B market growing at a 33% CAGR. It’s the concept that numerous successful boutiques have built their business around, including F45, Orange Theory, Barry’s, etc. Despite HIIT’s broad appeal and long-term track record of interest, Hyrox is one of the first groups to successfully create a competitive environment and professional circuit for this community. I expect to see continued growth from Hyrox and am keeping my eyes peeled for new entrants with different formats and modalities.
Professional/Mass Participation Hybrid Events
In Part 4 of this series, I discussed the long-term potential of endurance sport-focused professional leagues. I wasn’t very bullish then, and unfortunately, I haven’t changed my stance since. I wish this wasn’t the case because these athletes deserve a platform that celebrates them at the heights of their sports, but I think it’s the reality. The two primary obstacles that these leagues face are 1. the available bandwidth of the average sports consumer and 2. the difficulty in capturing endurance sports in a television format.
Just since writing the last post, the National Cycling League officially closed its doors at the end of 2024 and terminated all contracts. This was after raising $7.5M in seed financing less than two years prior from notable names, including Will Ventures, Founder Collective, Collab Capital, and Impellent Ventures.
With all that being said, I believe there is still a market for professional endurance sports. The business model that will be most sustainable is not as a stand-alone entity that has to rely on spectators or media rights deals but rather a format that blends the professional race with a mass participation experience.
This isn’t a novel concept. “Gran Fondo,” which originated in Italy in 1970 and translates to “Big Ride,” is a cycling event that blends competitive racing and recreational riding. Many notable races already follow this format, such as Unbound Gravel. At its core, Unbound is a mass participation event, but it’s also one of the many races that professionals ride to accumulate points on the Life Time Grand Prix. The result is professional racers riding alongside weekend warriors.
Would it be nice to have stand-alone professional races? Of course. But the Gran Fondo-style solution is the cleanest path forward to making professional endurance sports sustainable. There is an element of economies of scale with shared race course logistics, human capital, technology, and race overhead. Additionally, I think it’s a selling point for race participants to be able to rub shoulders with the top athletes in the sport.
Rather than being upset that there is not enough media interest to create stand-alone professional leagues, I think the endurance sports world should embrace these incredible, unique formats, as they offer something that few other sports can offer. You’re not going to be playing alongside Lebron James in your pickup basketball game, but you do have an opportunity to bike alongside Keegen Sweson or run alongside Courtney Dauwalter.
Race Ecosystems
A fascination with the Life Time Fitness business model is what started me down this rabbit hole in the first place, and I’d be remiss not to highlight their “ecosystem development” as a strategic approach that I’m very bullish on for other endurance race operators. In both mountain biking and trail running, Life Time has acquired some of the most high-profile events throughout the country and packaged them together to create a racing ecosystem.
This ecosystem makes sense for several reasons. First, as I mentioned in Part 2, having a multi-race platform offers synergistic opportunities. Human capital, race technology, and corporate overhead are shared across the platform.
Secondly, there are cross-promotional opportunities. Once you complete one race, Life Time gives you early access or discounts for entry in a sister race. Personally, I’m excited about trying races in different locations rather than doing the same one over and over again. Why search through the highly fragmented market for races all over the country when I can stick with a trusted provider like Life Time and know at least the baseline quality of race operations?
And finally, Life Time has created a tiered structure within its ecosystem, with the Leadville 100 sitting at the precipice. All races within the Life Time system are qualifying events for the Leadville 100. This drives demand, particularly outside of the local market, for races that can be used as a stepping stone for Leadville. When I raced the Austin Rattler last year, I met people from Colorado, Utah, New Mexico, and Minnesota, all coming into town for a chance to qualify for Leadville.
I think this ecosystem approach is a really smart way to solve the difficult single-unit economics at the individual race level. Given how fragmented the endurance race market is currently, it is inevitable that many other race operators will follow a similar approach.
Community Driven Competitions
This is more of an anecdotal reflection rather than any hard research, but I’m bullish on the endurance sports, events, and experiences that emphasize community. Aside from professionals or the most competitive age groupers, I think so many people are attracted to endurance events because of the sense of community they can create. This is why the pre-race expo and post-race celebration have become almost just as important as the race itself. 3 years ago, I ran the Austin Marathon for the first time. After crossing the finish line, ~10 blocks of Congress Avenue were blocked off for vendors, beer gardens, live music, photo stations, etc. People stayed at the post-race party longer than the race took itself.
Although participating in an endurance sport is often an individual experience, many people are drawn to it because of the communities that are created in the process. It's common to join training groups as you work towards a goal, and there is a sense of post-race community that is developed through a shared “suffering” experience. There are few other instances in life in which someone would feel comfortable high-fiving, hugging, and sharing a beer with a complete stranger while being in their most vulnerable state, worn down and sitting in smelly clothing. But this is a guaranteed scene you will find at the finish line of endurance races across the country. I think that’s a testament to the ability of these shared experiences to break down barriers and create a togetherness that I think our society is desperately looking for. In our ever technologically connected society, people are searching for a sense of community more than ever. Not community in the sense of an online group or connecting with faces via Zoom, but the real, authentic community. I personally love endurance sports in part because of the sense of community and connection that I can develop with others, and I’m excited to continue to find investment opportunities in the space to expand that access to a wider reach.
Thanks for following along.