Disrupting the fishing industry through creative monthly subscriptions.
Raised to Date: Raised: $216,362
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To date and as of Nov 13, Recur Outdoors has raised $104K through WeFunder
The Recur Outdoors team has been selected as a “Deal To Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10-20% of our deal diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to email@example.com.
Recreational fishing has always been a national pastime for Americans. In 2017, over 49 million Americans went fishing, more than hiking, camping, and mountain biking. In fact, more people went fishing than played tennis and golf combined, and its popularity shows no signs of decline.
33% of fishing participants are younger than 24, and 60% are younger than 45. With 11.6 million youth fishing each year, fishing’s market size shows signs of sustainable growth into the future.
But, to engage in fishing properly, individuals need to have the right equipment. And while veteran anglers are able to navigate the sprawl of equipment stores and choose rods, flies, and other gear, newcomers to fishing may find it difficult to start out.
There are, of course, specialty fly-fishing stores, but these stores are few and far between, and more generalized sporting shops often sell equipment, but don’t provide the specialized expertise that a small specialty store would have on how best to use equipment purchased.
Recur Outdoors is a company with four distinct brands, supplying all the necessary equipment for a successful fly fishing outing: bait, rods, reels, and guidance.
Their first brand, and largest so far, is Postfly. Consumers go on the website where they subscribe for fly boxes for increments of 1, 3, 6, or 12 months. Casual anglers can subscribe to regular boxes for $19.99/month, and more avid anglers can subscribe to their “Guide Series” boxes for $39.99/month, with double the amount of flies and additional supplies included.
Subscribers indicate what kind of fish that they hope to catch and what region they live in, and the team at Postfly curates each subscriber’s box of flies specifically for each desired purpose. Each box also comes with a newsletter containing deals and tips for how best to use the included items in the box, and guide series boxes come with extra new products, along with streamside tools and accessories.
Month-by-month, subscription boxes do not repeat, which incentivizes consumers to continue their subscriptions and learn more about the industry.
Their second active brand is The Wade Rod Co., which is aimed towards beginners hoping to purchase high-quality rods for inexpensive prices. These rods can be purchased with a financing option to spread cost across six months.
Two of their other brands are still being rolled out; Pelican Reels is estimated to launch November, 2018 and Guidehire in April, 2019.
Their business is primarily targeted toward aspiring new anglers. Experienced fly-fishermen may have their own opinions and expertise in bug science, and prefer the increased flexibility of choosing their own bugs. However, newcomers ma y find the steep learning curve an intimidating obstacle to picking up the hobby.
With an intuitive subscription system that includes guides and tips to using equipment well, their fly boxes are just as much about education about the sport, rather than just a fly delivery service.
Their different brands also cater to every need of a newcomer. Once Pelican Reels is launched, a customer could potentially buy a rod, reel, and bait all from Recur Outdoors. This horizontally integrated system is an effective way at boosting Customer Lifetime Value, by increasing sales without any additional marketing.
Additionally, the deals included in Postfly’s boxes may also be very useful in looping existing fishers to purchase additional rods from The Wade Rod.
Recur Outdoors has previously received a $70K accelerator, $225K in loans, and $250K in a previous equity raise. Including the funds they’ve raised in this round so far and discounting loans, the company has $424K in equity financing. But, their total revenue, which reached $1.3M in 2017, is more than enough to cover any loans and continue operations if reinvested.
Across their brands, they currently have 7,000 active monthly subscribers, and currently gain 600-700 subscribers per month. They also have managed to maintain a 94% customer retention rate. With such a high retention rate, and year of subscriptions equivalent to $240 of revenue, the company’s revenue can be considered as growing by over $100K a month.
Even more, this strong growth in revenue can be expected to accelerate. Recur Outdoors is looking towards expanding its marketing beyond Facebook, Instagram, and direct-to-consumer emails. With this round of funding, the company will be able to explore alternative ways to boost brand awareness, and is looking towards opening kiosks for sales.
These kiosks are meant to operate like vending machines, where consumers can buy rods. Each kiosk costs less than $1K, and only four rods need to be sold before the company breaks even and begins to profit.
In fact, these kios ks are meant to include features where consumers can learn about the specifications of each rod and make an educated purchase accordingly. These kiosks could be placed in retail stores and other high-traffic areas, with retailers making a commission on each sale.
Though this idea is still undergoing proof of concept testing, if successful, this round of fundraising may be used mass-manufacture these kiosks.
Especially considering that these subscribers may also be enticed into buying products from the company’s other brands, Recur Outdoors’ cash flows can be expected to accelerate even more in the next few years.
1. Consistent Revenue Growth
The company is well positioned to grow significantly in the next few years. Its $100K revenue growth per month is impressive, and the fact that this growth will likely accelerate in the next few years is very encouraging for any prospective investors.
Their $1.3M in revenue can also be reinvested to further grow its brand awareness and exponentiate revenue growth. Considering that there are over four million licensed fly fishermen, and the high annual revenue that each fly-fishing subscriber represents, the company’s valuation is fairly inexpensive and investments should be able to yield a fairly high rate of return.
Most importantly, their sales growth is indicative of a strong demand for its products. By marketing directly to individuals who are interested in dabbling in fly-fishing, and retaining customers in their insulated product system, customers acquired through their marketing efforts are likely to continue buying their products instead of growing into other products.
The educational aspect to its business is also a unique advantage on consumers’ alternatives, since people who might not have the patience or time to go to specialty stores will still be able to learn a new hobby and expand on their interests. With four million licensed fly-fishers in the United States, Recur Outdoors has a lot of room to go before it saturates the market, and therefore has a very high potential for growth.
2. Promising Product Roadmap
The company has a very promising product roadmap. The company very clearly needs more funding for marketing to kickstart its accelerating revenue growth. If the company expands into new marketing channels, then their brand awareness is likely to jump, boosted by the influx of consumers who may not have been exposed to their product from the company’s original marketing channels. Similarly, if the company spends its money on kiosks, the company will enjoy the increased revenue from in-store kiosk sales and enjoy more brand awareness. The synergy between its various brands and product offerings also applies to kiosk sales, since if consumers who buy a rod are satisfied with their product, they may be likely to sign up for Postfly fly boxes.
With the current $104K from this raise, the company can already fund inventory for their kiosk program. As more funds are raised, the company should be able to not only fund their kiosk initiative, but boost their customer acquisition spending by up to 500%.
The company is also looking to involve more experienced veteran anglers. If they are successful at creating a product offering that would suit the needs of highly experienced fly-fishers, then the company would have a product for every fly-fisher in the market, all four million.
3. Strong Economic Moat
One of the most significant contributors to Recur Outdoors’ value is its business model. With its current subscription-based model, and horizontally integrated product offerings, newcomers who subscribe to the company are not likely to abandon subscriptions for other competitor companies, especially if the newcomers are fully equipped with Recur Outdoors’ products.
For its strong growth potential and its promising product timeline, Recur Outdoors is a Deal To Watch that may have some sizeable acquisition opportunities in the next 3 to 5 years.
With fly fishing being an industry that has been slower to innovate, Recur Outdoors just may provide the next avenue for growth that incumbent fly fishing companies will look to in the coming years.