The opening of Topgolf’s newest location in El Segundo, California in April wasn’t only important because it was the company’s first foray into the highly coveted Los Angeles market, it also represented Topgolf’s next phase of growing its brand and, more importantly, the game of golf.
The first-of-its-kind experience on the busy Pacific Coast Highway includes Topgolf’s technology-driven experience complemented with an adjacent 10-hole par-3 course via the refurbished The Lakes at El Segundo.
“I refer to it as the culmination of the Topgolf-Callaway strategy all in one place on about 30 acres,” Topgolf CEO Artie Starrs says. “If you’re on the property, you can clearly see our commitment to growing the game—both the traditional game but also the game of Topgolf—and any way you choose to play it.”
Founded in 2000 in the United Kingdom, Topgolf opened its first venue in the United States five years later in Alexandria, Virginia. The company currently boasts 77 outdoor locations in six countries around the globe with eight more expected to open in the U.S. and U.K. by year’s end; a venue in Bangkok, Thailand set to debut in August will bring Topgolf’s total to 86.
The plan, according to Starrs, is to build 13-15 venues over each of the next 3-4 years, which would include 11 owned and operated venues and two or more international franchise locations.
“We’re just widening the aperture on this thing that is great, which is golf, but making it a lot more fun and more accessible to more people,” Starrs says.
While Topgolf’s golf-entertainment venues, highlighted with its Toptracer technology, food and drink offerings, and games like Angry Birds and Jewel Jam, are focused on breaking down golf’s costly and timely barriers to entry by making it fun and accessible to all, the brand isn’t resting on its laurels. The addition of green grass opportunities continues to immerse golfers—novices and experienced players alike—further into the sport, which has seen a resurgence in popularity as a result of the coronavirus pandemic.
There were 25.1 million traditional, on-course golfers in the U.S. in 2021, according to the National Golf Foundation, and 24.8 million off-course golfers, including 12.4 million who exclusively played off-course forms of the game at golf-entertainment venues like Topgolf, in simulators or at driving ranges.
“I do see some opportunities for us with more green grass,” Starrs says. “We have another project we’re working on that’s in the Los Angeles area that I’m very passionate about that will be a bigger golf course and will have the same sort of night life and Topgolf venue associated with it.
“I think there’s more to come from us on that.”
While the second L.A.-based Topgolf venue with green grass is still “a couple of years from being opened,” Starrs says a major focus for the brand is to continue to expand its marketing and awareness.
Despite recording approximately 20 million unique visits annually at its 77 current outdoor venues and 35 million downloads of its World Golf Tour online/mobile game, Starrs says the brand’s awareness could use a big boost. Topgolf has 479.7K followers on TikTok and 350K followers on Instagram.
“Our awareness is still very low,” Starrs says. “Even in the markets we’re in, less than half the people know we’re there. We’re having tremendous success but there are a lot of people who don’t know Topgolf exists, let alone what we do. We think the future’s pretty bright.”
A major contributor to Topgolf’s current (and future) growth is thanks to a merger with Callaway Golf Company in March 2021.
Under the terms of the merger, which was announced on October 27, 2020, Callaway issued approximately 90 million shares of its common stock to Topgolf shareholders, excluding Callaway, which previously held approximately 14% of Topgolf’s outstanding shares. Following the merger, Callaway shareholders owned approximately 51.3% and Topgolf shareholders owned approximately 48.7% of the outstanding shares of the combined company.
At the time of the merger announcement, Topgolf generated approximately $1.1 billion in revenue in 2019 and was growing at a 30% compound annual rate since 2017.
“It’s been an amazing story as Topgolf has recovered from the Covid shutdowns much faster than we expected and then impressively ramped its brand momentum,” says Callaway CEO Chip Brewer. “Not only are new venues opening beautifully, but the existing venues are increasing in popularity and growing same venue sales. The brand and business momentum has exceeded our initial expectations and shows even greater potential than we imagined at the time of the acquisition.”
More than a year later, the merger has allowed Topgolf to accelerate its growth by building new venues and a new mobile game, establish equity across the entire industry landscape—for example, the Topgolf logo can be seen on the sleeves of PGA Tour pros Jon Rahm and Sam Burns—and gives the company opportunities to collaborate with other Callaway brands including TravisMathew, Ogio and Five Iron Golf.
“The core of golf is unbelievably approachable, which is meaningful time with friends and family and the thrill of hitting a shot,” Starrs says. “If you dial golf down to its core, that’s why I love it. The thrill of hitting a shot deserves to be democratized, and I’m proud of the way our team is doing that every day.”