The Pitch: The Irish golf ball that scraped €250k funding four years ago and is now worth €20m
Golf: Seed Journey An Exceptional
When Golf Digest revealed its 2024 Hot List last month two Irish balls were hailed alongside the biggest names in the business.
Sitting with Titleist, Callaway, TaylorMade, Bridgestone and Srixon were two editions from the Seed brand, a company in just its seventh year of production following conception in a midlands university.
The GD Hot List chart is the most globally important performance analysis of balls - tested by robots (for consistency) and elite players (5 handicap or less) for feel - where scores are administered for a variety of moves.
The Seed SD-02 was celebrated for its low spin and flatter flight off the driver and for its spinning capabilities into the green, while the SD-17 – a lower budget edition – saw the brand hailed for its quality.
“To produce such a ball is complex at the price point the company is trying to achieve,” the judges remarked.
The story of how the Seed was developed at Carlow’s South East Technological University (SETU) through to its recent €20m valuation by US venture capitalists, charts an exceptional journey.
The paper valuation covers future short-term potential against current values, including the ongoing growth of its current customer base of 100,000, live sales across 44 countries and 25,000 balls sold per month.
Such surging worth is extraordinary given the extreme difficulty of breaking into the highly competitive golf ball and brand market, occupied by stellar traditional US and Asian brands.
Balls make up the most popular type of product purchased by golfers outside of golf clubs across the golfing retail segment, according to the most accurate industry data available.
Figures for the last sales year show that almost one tenth of items purchased here are balls (8.97 per cent) compared to 30 per cent of the market taken up by clubs (woods – 12.2 per cent, irons - 13 per cent and wedges - 2.8 per cent).
This data comes from TGI Golf, the retail services group which supports 480 PGA club professionals across the UK and Ireland – 134 coming from the 377 registered golf clubs across the 32 counties.
TGI Golf breaks up its business into four key segments - Balls, Apparel, Equipment and Shoes.
The breakdown of the golf ball business is particularly revealing in demonstrating the consumer and purchase habits of golfers and the power of the leading brands, with one standout marque.
Titleist 53.07%.
TaylorMade 16.46%.
Callaway 12.30%.
Srixon 11.83%.
Wilson 1.25%.
While it’s probably no surprise to see Titleist at the top – Bryson DeChambeau used its Pro V1x Left Dash to conquer Pinehurst No. 2, and Rory McIlroy, at the US Open last weekend – its margin of dominance is stunning.
While half of all new balls sold are Titleist, the brand sells 13 per cent more product than the combined total of the next three players – TaylorMade, Callaway and Srixon.
With Wilson making up the top five, these key brands occupy dominate 94.91 of the ball market – so a particularly tough nut to crack.
What’s even more interesting from a sales and retail perspective is that that the margin of return from ball sales is less than for clubs and for apparel, sitting at 31.68 per cent.
So while shops make the smallest amount of percentage profit from balls, the manufacturers know that if retailers don’t stock those brands, then they will not have the hook to bring customers into their stores.
And with Titleist clearly a ‘must stock’, you will then appreciate why the margin of profit for their balls is at the very lowest return with just 27.5 per cent going to the retailer, compared to Srixon which returns 43.2 per cent.
But what if the manufacturer only sold directly to the consumer, cutting out the overheads of supply to a retailer, and what if those customers were asked to return as regular subscribers?
That’s where Founder and CEO of Seed, Dean Klatt saw opportunity, but only if he could come up with an Irish product to rival the best in the business – Titleist’s ProV1.
Klatt, who lives in Co Kildare, has a deep understanding of the golf market which was formed in Queensland where his father John was the professional at the renowned Virginia Golf Club in Brisbane, which produced Greg Norman and Wayne Grady.
“I was one of his failures,” he laughs.
Instead of a career on the course he spent his formative golfing years in product development, where he readied Cleveland Golf for its eventual acquisition by Srixon.
Klatt also worked with mid-tier US brand Ogio golf bags which he scaled up for sale to Callaway before moving into global distribution through its European rights, to establish digital sales platforms and websites.
He quickly identified that a new more valuable market was emerging in golf 10 years ago after spotting that more rounds were being played by younger people and more women, coming to the game.
These types of consumers and “how they buy products compared to the typical traditional shoppers” offered opportunity to explore sales for a digital native audience, before settling on the highly consumable golf ball as the product of choice.
Enterprise Ireland picked up the brand and suggested he visit IT Carlow, now SETU, which has an aerospace wind tunnel on campus to help with flight development and design prototypes.
His first ball was launched in 2017, the SD-01, and was picked up by the PGA EuroPro Tour where a fees and product contract saw Seed named as the official ball.
The big break came when golf instructor and YouTuber Peter Finch featured the brand in one of his clips, comparing it favourably to the Titleist ProV1 – double the price of the Seed.
“When that video came out, I remember waking up the next morning at home and looking at my laptop and all of these orders had come in, and I went down to my wife and said: ‘I think we’re going to be okay here’,” he recalls.
Other YouTubers got in touch and very quickly, almost by accident, the marketing strategy grew organically with the story of the Irish golf ball reaching new audience, and that audience sharing their experience with friends and followers.
A key factor was that they were telling a story of an Irish ball - to a largely Irish diaspora - which performed well and which didn’t cost the earth to buy: €29.00 for a box of its top of the range balls, compared to €55 for ProV’s, and around €15 for its lower grade editions.
“We also knew consumers were sick of the story where every product that comes out claims to be the best ever, here we had the customers talking up its qualities,” adds Klatt.
“The idea of a small upstart Irish brand taking on the big guys is also an interesting appealing story and we’ve been able to tap into that market.”
The value of the Seed brand was analysed recently by a US Venture Capital firm which turned up a €20 million paper figure, from an initial valuation of €5m during Covid when Klatt crowd-funded €250,000 to stay in business.
Those who invested in that round of funding, and up to six larger US investors, now own 35 per cent of Seed, with Klatt the majority shareholder holding 65 per cent.
So what is the ultimate ambition for the company? Presumably sell the Irish golf ball onto a major player.
“I have a responsibility to the shareholders to give them a return on their investment, but I’m quite happy to continue growing the brand, so ‘either, or’ is good,” he ends.
With Northern Ireland now extremely unlikely to host matches at Euro 2028 attention has turned to alternative venues to soak up those five games.
While it is most likely that Belfast’s five matches will be shared between the remaining co-hosts – Ireland, England, Scotland and Wales – there is a view forming that Pairc Ui Chaoimh may be an alternative.
While Croke Park will not get the games – UEFA do not want two venues in any city, except London – the home of Cork GAA may provide an option.
We will explore this possibility more in the coming days, but with Euro 2028 sources admitting Casement Park will now not happen in time for the competition, Cork may be considered in the months ahead.