Ambitious UK padel operator Soul Padel has increased its appeal to investors after securing seed investment status.
The business, based in north-west England and founded by former retail and healthcare executive Mark Hewlett, has received advanced approval for the HMRC seed enterprise investment scheme (SEIS), enabling investors to secure tax efficient investments in the world’s fastest growing sport.
Padel has significant investment appeal as a 2023 Global Padel Report produced by Deloitte and Playtomic noted the padel ecosystem is expected to be worth €2bn by 2026. It also expects the worldwide number of courts to double from 40,000 to 85,000 in the same period.
The United Kingdom is part of the global expansion and is an early-stage market for padel, which is seeing exponential growth. In 2023 the sport saw a doubling of courts to around 400 across the country in the space of 12 months. In the UK, padel has in excess of 90,000 players and is also backed and regulated by the Lawn Tennis Association.
Soul Padel is looking to open a number of indoor facilities, including a centre of excellence, to meet much-needed demand.
The company, which also aims to create community hubs through padel, has identified various locations across north-west England. It recently announced a partnership with renowned Spanish-based padel court manufacturer and installer Padel 1969, and has appointed a non-executive director with significant investment expertise.
Hewlett said: “Now is the right time for investors to be putting money into padel. The sport is at a nascent stage in its growth in the UK and it is recognised as the fastest growing sport in the world.
“Padel offers a diversified investment opportunity into the rapidly expanding ‘competitive socialising’ sector. Securing SEIS status signals to the market that we are serious about the growth of the business.
“The sports and leisure industry has yet to tap into this investment resource, making Soul Padel pretty unique.
“We have achieved SEIS status with the support of Sam Simpson at Founder Catalyst and have purposely taken the time and effort to get approved by HMRC, which is no mean feat. We want to encourage and attract investors, allowing them to take advantage of the tax incentives.”
The advantages for investors include receiving an initial tax relief of 50% on investments up to £100,000 (or £200,000 for shares issued on or after 6 April 2023) and Capital Gains Tax exemption for any gains on the SEIS shares held for at least three years.
Hewlett added: “I’m investing significant personal funds into Soul Padel to get the business started but I certainly welcome the right investors, who want to be part of and contribute towards our journey and that of padel. This is a good time to get involved and I’m looking forward to talking with investors who want to be part of Soul Padel.”
Data from HMRC, published in May last year, revealed that in 2021 to 2022, 2,270 companies raised a total of £205 million of funds under the SEIS scheme, the highest amount since the launch of the scheme.
Most companies receive investments of over £50,000 through the SEIS (69% in 2021 to 2022). In 2021 to 2022, around 45% of companies raised amounts over £100,000, compared to 39% in 2020 to 2021.
Businesses in recreational, arts and entertainment sectors accounted for around five per cent of the funds invested. The Information and Communication sector accounted for £83 million of investment (40%), with the Professional, Scientific and Technical, the Wholesale and Retail Trade, Repairs, the Manufacturing sectors together accounting for 32% of investment.
Regionally, companies registered in London and the south east accounted for the largest proportion of investment, raising £137 million (67% of SEIS investment) in 2021 to 2022. Businesses from the north west region accounted for less than 10 per cent.
