|Simon Mottram standing outside Rapha's store in Soho, central London|
Rapha, founded by branding consultant and lifelong cyclist Simon Mottram, announced on Monday that it had been sold to RZC Investments, a private equity firm run by Steuart and Tom Walton. They are grandchildren of Sam Walton, founder of Walmart.
The sale values Mottram’s stake in the business at £25m, although the company said he would retain a “significant part” of his shareholding and would remain chief executive of the business. Many of Mottram’s friends and family are also shareholders.
“This is an exciting day for Rapha,” Mottram said. “The arrival of RZC Investments as a shareholder means we can pursue our mission to elevate cycling as a global sport and recruit more participants by engaging them and enabling them to ride with us at all levels.”
Mottram said the cash injection from RZC would be spent on its global expansion, with plans for 100 stores or “clubhouses” around the world. The company, named after a defunct French cycling team from the late 1950s, has stores as far afield as Seoul and Chicago.
Steuart Walton, co-founder of RZC, said: “Rapha represents the very best in the world of cycling. Our investment demonstrates our enthusiasm for its quality products, amazing community of cyclists and customers and its strong future. Rapha’s strategic vision has set the company on a path of tremendous growth and opportunity.”
The company, which employs 450 people, recorded sales of £63m last year, a 30% increase on the previous year, as it tapped demand for its high-end gear.
While Rapha may not be a household name, in the tribal cycling community it is seen as a “Marmite” brand, at the centre of fierce forum debates where detractors see it as the fiefdom of wealthy metrosexuals or the “Raphia”.
Its sells everything from £20 embrocation cream – which redirects blood back into your lower extremities by stimulating blood vessels – to bespoke holidays in the Alps. It even has its own riding club with 9,000 members paying £135 a year for perks including free coffee in its clubhouses.
Founded in London in 2004, selling directly to consumers via its website and from a handful of shops, Rapha is today one of the biggest names in cycling clothing.
The firm is popular among serious amateur cyclists, and previously supplied the kit to Team Sky, the leading British professional cycling team that includes Chris Froome, the four-times winner of Tour de France.
Rapha saw its revenues grow by 30% in the year to January to £63m.
Despite the firm's current success, Mr Mottram faced difficulties when he was first trying to secure funding to start the business back in 2001.
Mr Mottram told the BBC he was seen as a risky investment at the time because it was a number of years before the current boom in the popularity of cycling began.
"No bank would touch me," he said.
"Who was really interested in cycling back in 2001 and 2002? It was just something us weirdos did."
Mr Mottram, who had previously worked in brand development, was finally able to secure the funding from six wealthy private investors and "a long trail of friends and family".
The overall investment deal meant that from day one he only had a minority stake in the business.