America has a loneliness problem.
Despite the infinite number of digital apps that aim to help us find romantic partners and friends, many people still find themselves searching for connection.
Earlier this year, 30% of US adults in the 18-34 age bracket reported feeling lonely every day or several times a week, according to the American Psychiatric Association. And single adults are almost twice as likely as their married counterparts to feel lonely on a weekly basis.
A big part of the solution is finding ways to build a sense of community offline. Think: group fitness, volunteering, group retreats, offline dating, and meetup groups. While many companies in these sectors use websites and apps as a starting point, their endgame is to facilitate adult connections out in the three-dimensional world.
With more Americans seeking to find their tribe offline, the community building space offers a deep pool of opportunities for dealmakers. In this PE Playbook, the Grata team has put together the need-to-know trends for investors considering making moves in the market, including:
- How the industry is fragmented
- Where acquisitions are happening
- Which segments are seeing the most growth
The market map above is not intended to be an exhaustive representation of companies in the space.
Companies that provide services that fall into multiple segments are categorized in this report by their primary offering.
Industry Overview
Market Distribution
Geography
Source: Grata
Unsurprisingly, the most populated states (California, Texas, Florida, New York) have the highest concentration of community-building companies. More people equals more potential connections equals more business opportunities.
But investors could find untapped potential in metropolitan areas of less populated states. Many of these areas have large populations of young adults, who are drawn to the convenience of city living for lower costs. For example, nearly 53% of the population in Salt Lake City, UT is under 35. In Charleston, SC, 28% of the population falls in the age range of 20-39.
Ownership
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Source: Grata
With the top 10 companies in the community building space accounting for less than 1% of industry share, the opportunities for an investor to establish themself as a leader are virtually endless.
There are nearly 50,000 independently owned companies offering services across the group fitness, volunteering, group retreats, offline dating, and meetup group markets that are ripe for acquisition.
Segment Distribution
Source: Grata
This report focuses on the following segments of the community building industry. Grata users can see a curated list of some of the companies used to create each segment by clicking the links below.
- Group Fitness: Companies in this segment offer fitness classes for groups. These include boutique studios and gym franchises.
- Volunteering: These companies organize volunteer events for personal and corporate groups.
- Group Retreats: Companies in this sector offer single- and multi-day events for groups. These often focus on wellness or spirituality, but can also include outdoor/adventure excursions.
- Offline Dating: These companies provide services such as matchmaking and speed dating events to help singles meet.
- Meetup Groups: Companies in this category facilitate in-person meetings and events for people with common interests.
Public Comparables
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Source: Grata
If you’re a dealmaker looking to make moves in the community building space, offline dating is a strong place to start. Nearly 100% of companies offering singles events and matchmaking services are small (39 employees on average), independently owned operations, so public company data is limited for this sector. But the sector’s 20.8x average EV/EBITDA multiple isn’t for nothing.
Singles are increasingly feeling fed up with the modern dating experience and dropping the apps for more old-school dating services in the hopes of making a love connection face to face. In-person singles events are rapidly gaining popularity — Eventbrite reports that attendance jumped by 42% from last year.
One challenge for these companies is maintaining a consistent customer flow. Hosting speed dating events, for example, requires finding new locations frequently, selling a sufficient number of participant tickets, and acquiring new customers as people (hopefully) pair off. For investors considering the space, acquiring offline dating companies across multiple urban locales could be the key to big returns as demand for the services continues to ramp up.
For investors looking for more established sectors, group fitness seems to have fully recovered from the hit it took during the pandemic. One of the first places people go when they’re looking to make new connections is the gym. Two-thirds of gym-goers prefer exercising with other people over working up a sweat on their own, according to a Les Mills Global Fitness Report.
And there’s no shortage of options, from big-box gyms to boutique studios. With so many choices available to gym goers, the key to success for dealmakers is to identify brands that already have a loyal following. Fitness class fans tend to find a studio they love and return again and again (Orangetheory, Barry’s Bootcamp, Rumble, etc). Even more boutique studios that have frequent drop-ins can be profitable because they can charge their most committed customers memberships at premium prices.
The group retreats sector is also gaining momentum as consumers increasingly look to escape the stresses of their jobs, detox from their digital devices, and connect with others. The space has seen an average yearly revenue growth rate of 17.1%. Retreats focused on wellness (yoga, meditation, spa therapies, etc.) are especially promising — the business is projected to be worth $364B by 2032, according to Allied Market Research.
Private Comparables
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Source: Grata
As discussed in the previous section, group fitness is a pretty obvious moneymaker. Perhaps more surprising is the volunteering sector, which generates an average of $10.5M a year. Volunteering is also the fastest-growing sector of those analyzed in this report.
While rates of individual volunteerism have actually dipped in the US, corporate volunteerism is on the rise. Companies looking to boost employee engagement are partnering with volunteer organizations to plan events inside and outside the office. Most corporate volunteer events require a donation that works out to around $179 per employee, according to Realized Worth. Investors considering moves in the volunteering space should take a serious look at organizations with substantial corporate programs.
Notable Acquisitions
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Source: Grata
Group Fitness: Verod Capital Management Acquires i-Fitness
Group fitness isn’t only big in the US. In February, West Africa-based private equity firm Verod Capital Management bought i-Fitness, a leading fitness chain in Nigeria, from Cardinal Stone Capital Advisers for $12M.
i-Fitness reportedly had over 26,000 members across 21 locations in Nigeria at the time of the acquisition. Verod stated that the deal would help “foster a healthier and more active West Africa” and “cultivate a culture of well-being and empower communities.”
If you’re an investor interested in i-Fitness, try these:
Volunteering: Fathering Together Acquires City Dads Group
In November, nonprofit Fathering Together acquired City Dads Group, an organization with chapters in 41 cities in the US and Canada. City Dads organizes in-person events to support and empower fathers.
The acquisition will reportedly expand the companies’ reach to over 150,000 fathers around the world with in-person groups in the US, Canada, Kenya, and Malawi. It will also enable Fathering Together to improve its program offerings.
If you’re an investor interested in City Dads Group, try these:
Group Retreats: Odysseypbc Acquires Atman Retreat
Oregon-based Odysseypbc, which offers legal psilocybin experience retreats, purchased Atman Retreat in March. Atman Retreat has reportedly been offering psilocybin retreats since 2019.
Odyssey’s group experiences are four-day retreats that take place at licensed service centers across Oregon. Prices start at $3,500 and go up to as much as $6,500.
If you’re an investor interested in Atman Retreat, try these:
Offline Dating: LUMA Luxury Matchmaking Merges With Rose Matchmaking
In December, LUMA Luxury Matchmaking joined forces with Texas-based Rose Matchmaking. Both parties have historically catered to busy professionals and entrepreneurs, as well as celebrities and millionaires.
Through the deal, LUMA and Rose clients will have access to a broader pool of potential matches.
If you’re an investor interested in Rose Matchmaking, try these:
Meetup Groups: Bending Spoons Acquires Meetup
Meetup, the name in the meetup group sector, was acquired by Italian tech company Bending Spoons in January of this year. Bending Spoons reportedly plans to use its proprietary technology to continue driving Meetup’s international expansion and boost the platform’s membership.
Bending Spoons also announced the launch of the Meetup Community fund at the time of the acquisition, a $50,000 initiative geared toward supporting event organizers in Meetup’s community.
If you’re an investor interested in Meetup, try these:
Get the Most Out of the Playbook
If you’re an investor interested in making moves in the cannabis space, Grata can help you put the insights in this article into action.
From in-depth market research to sourcing to pipeline management and relationship nurturing, Grata’s end-to-end dealmaking platform streamlines your workflows so that you can close more deals.
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