Topgolf's founders raised $34M to shake up a new sport. A 28-page deal memo reveals their plans.

Business Insider

01-05-2025

Topgolf founders Steve and Dave Jolliffe are trying to shake up a new corner of the sports world.
Their new startup, Poolhouse, raised $34 million to bring the Topgolf model to billiards.
Poolhouse's lead investor shared a 28-page deal memo that breaks down the business's growth plans.
Topgolf founders Steve and Dave Jolliffe have raised $34 million for a new take on the game of pool.
A deal memo from one of the company's lead investors reveals its strategy to stand out amid a slew of social sports concepts.
The new venture, Poolhouse, plans to bring Topgolf's recreational model to billiards. It uses tech to make the game more social and is building a lounge-like experience with higher-end food and drinks than you'd find in a typical sports bar.
The UK-based company plans to open its first location in London next year and then expand to the US.
VC firms Sharp Alpha and DMG Ventures led Poolhouse's seed round with a primary close in October. The startup is also backed by investors including David Blitzer, Simon Sports, Active Partners, and Emerging Fund.
Sharp Alpha, which shared its 28-page deal memo on the investment exclusively with Business Insider, sees Poolhouse as part of the burgeoning category of " competitive socialization." Companies are trying to modernize various recreational sports with concepts such as Puttshack, the Jolliffe's spin on mini golf, the darts chain Flight Club, and racing simulator F1 Arcade, which raised $130 million last year.
Topgolf helped popularize the category with its gamified indoor driving ranges and exposed a new audience to golf. In 2020, Callaway bought Topgolf in a $2 billion deal.
"Who would have thought 20, 25 years ago when Topgolf was created that people would be going in dresses and high heels, having never swung a golf club before, and having a great time playing golf," Poolhouse CEO and cofounder Andrew O'Brien told BI.
The Topgolf founders positioned Poolhouse as their "most ambitious" and "scalable" business yet, according to deck.
O'Brien said Poolhouse outfits regular pool tables with tech to determine how good or bad each player is early in the game, and then introduces handicaps to level the playing field, such as bonuses for beginners or hazards for pros. A game can include up to 12 people.
The gamified elements are projected onto the pool table, so the facilities don't need to be as cumbersome as some other social sports concepts.
Where a Topgolf venue can cost more than $40 million to build, O'Brien said Poolhouse aims to spend around $15 million to $20 million per location, though it may spend more in pricey markets like New York or Las Vegas.
Many companies have adopted the "Topgolf for X" model in other areas, from darts to ping-pong to racing.
"All of these venues are fun to visit. Not all of them are investable," Sharp Alpha wrote in the deck.
The firm, which focuses on sports, gaming, and entertainment, spent over a year evaluating concepts in this space before investing in Poolhouse.
It said successful models have four key elements:
Strong food and beverage revenue
High frequency, in that they're built around an everyday hobby
Conducive to events like corporate parties or birthdays
Proprietary software that can create a high-margin third-party opportunity
To that last point, O'Brien said Poolhouse is exploring franchising and licensing to scale its brand beyond its own venues.
Poolhouse's founders were also a big draw for investors. Danzig described the company as a "textbook case of founder-market fit."
Here's the deal memo from Sharp Alpha, which redacted some details:
Poolhouse is looking to bring the Topgolf experience to billiards
Sharp Alpha
Sharp Alpha's deal memo outlines its investment in Poolhouse and the competitive landscape
Sharp Alpha
The deal memo includes:
Deal overview
Opportunity
Competitive landscape
Recipe for success
Product
Comparable companies
Team
Go-to-market strategy
Risks
Financial model
It gives an overview of the company, including its investors, concept, and team
Sharp Alpha and DMG Ventures led the seed funding round. Other investors included David Blitzer, Simon Sports, and Active Partners.
The company's team includes execs with experience in hospitality, food and beverage, augmented reality, and computer vision.
The slide also describes Poolhouse's business and revenue streams:
What is Poolhouse?
Poolhouse is a software company building a cathedral to tech-enabled pool where gamified billiards tables serve as centerpieces to high-end competitive socialization paired with refined food & beverage. This forms the foundation for a higher-margin revenue mix that includes licensing white label technology and franchising.
Revenue streams
Poolhouse-operated venues
Franchise/Joint-venture
Licensing to 3rd parties
Poolhouse is targeting 3 markets: restaurants, out-of-home entertainment, and events
Sharp Alpha
Poolhouse wants to be considered a "third place," which is a social setting that's separate from the home and the workplace.
This slide shows how demand for 'Third Place' experiences is surging
It includes charts on the share of American 30-year-olds who live on their own, have ever married, live with a child, or own a home — all of which seem to be trending down from the 1980s through 2023.
It also shows the growth in Google search volume for the terms "how to meet people," "meet new people," "where to make friends," and "feel lonely."
It says landlords want these kinds of venues
The slide reads:
Mixed-use spaces anchored by entertainment are coveted by landlords
Increase high-quality foot traffic
Attract multiple tenant types
Robust against the rise in online shopping
"A premium competitive socialization venue can have a hugely positive impact on a central London development. The success achieved by F1 Arcade at the ONC location has resulted in improved footfall for the shopping center, a significant halo effect sales increase for other operators, and notably higher rental asks for new incoming tenants." — Jonathan Peters, the Global President at F1 Arcade (previously CFO at Richard Caring restaurants).
A graph compares site-level EBITDA margins for traditional F&B and competitive socialization.
Sharp Alpha points to a variety of concepts in this space
Sharp Alpha
These include lounges, sports, and arcades.
They offer a range of value propositions
Sharp Alpha
The slide includes a word cluster analysis for four categories in this space: training facilities, watering holes, arcade 2.0, and adult playgrounds.
A map suggests London is a popular launchpad for concepts in this space
Sharp Alpha
It shows locations in London as of March.
Those businesses tend to expand next in the US, including New York, Boston, and DC
Sharp Alpha
The slide shows a map of competitive entertainment businesses in New York.
Successful models for these venues have 4 key qualities, the deck says
Sharp Alpha
These traits include high food and beverage revenue, high visit frequency, conducive to events, and high-margin third-party opportunities.
Poolhouse cofounder Steve Jolliffe says the startup is his 'most ambitious' yet
Sharp Alpha
The slide reads:
"Poolhouse is the most ambitious and scalable concept my brother and scalable concept my brother and I have created, representing the pinnacle of our lifelong work. Today, more people play Topgolf than on traditional golf courses in the US, and we aim to make an even greater impact on the world of pool." — TopGolf and Puttshack founder, Steve Jolliffe
It explains why the game of pool is ripe for reinvention
This slide reads:
Why Pool?
There is an opportunity to reshape how people perceive and play the game of Pool
Pool enables a business model that draws on all four ingredients in the Recipe for Success
The recipe for success is:
High F&B
High frequency
Conducive to events
High-margin 3rd party opportunity
Pool is widely recognized, accessible, and associated with social consumption
Pool tables are the perfect centerpieces for entertainment, with eating/drinking/socializing integrated into the game (as opposed to venues where consumption and socialization are separate from gameplay
Poolhouse games offer the perfect balance of engagement and effort + attention required to enable social experiences and maximize F&B
More examples of companies in the space
Sharp Alpha
A chart breaks down the companies by when they were founded, where they're based, number of locations, the cost per hour, alcohol association, athletic exertion, dwell time, and visit frequency. Some details are redacted.
The memo introduces the Poolhouse team
Sharp Alpha
The memo says Poolhouse has nine senior members with industry experience in addition to the Joliffes. They include Paul Hawkins from Hawk Eye Technologies, CEO Andrew O'Brien, and COO Matt Fleming.
Poolhouse's first location will be in London, by the Liverpool Street station
Sharp Alpha
The deck described risks to Poolhouse's business
Sharp Alpha
Sharp Alpha redacted these details in the version of the deal memo sent to BI.
It describes the margin profile for Poolhouse's locations
Sharp Alpha
The flagship locations will be in London and New York, the deck says. They will serve as showrooms for franchise opportunities and white-label customers, such as pool halls or hotels.
Poolhouse plans to charge per person per hour
Sharp Alpha
The details on "revenue assumptions" are redacted.
Sharp Alpha forecasts Poolhouse's net ROI and site-level EBITDA margins
Sharp Alpha
The forecasts are based on comparable companies. One graph shows net ROI for companies, including F1 Arcade, Bowlero, and Dave & Buster's. Another shows site-level margins for earnings before interest, taxes, depreciation, and amortization for companies such as Bowlero, TopGolf, and Puttshack.
This slide outlines the financial model
Sharp Alpha
Those metrics include table utilization, food and beverage cost of goods sold, licensing revenue, and capital expenditures per location.
It reads:
The most important metrics in the financial model are:
Table utilization
F&B COGS
Licensing revenue
Capex per location
We rebuilt the company's model from scratch, arriving at 7-year estimates summarized on this page. Our diligence process suggested the company may have been a bit aggressive on its utilization projections but too conservative on the EBITDA contributions of the white-label revenue stream.
We specifically sensitize Year 7 EBIDTA below on two key dependencies, F&B gross margin and utilization rate, compared to our base case projections.
The charts in the slide are redacted.
This slide summarizes the memo's key takeaways
Sharp Alpha
The slide reads:
Problem: The game of pool is desperate for reimagination at a time when demand for activity-based food & beverage experiences is surging.
Solution: A cathedral to tech-enabled pool where gamified billiards tables serve as centerpieces for high-end competitive socialization paired with refined food & beverage.
Traction: Construction is underway at Liverpool Street; multiple U.S. sites are under contract. These locations establish a foundation for a scalable, higher-margin revenue mix through technology licensing and franchising.
Market size: The out-of-home entertainment market alone exceeds $100 billion within the $2.6 trillion global entertainment and media sector. The events market, including corporate events and weddings, is valued at over $160 billion, while the US full-service restaurant market surpasses $400 billion.
Investment opportunity: We are leading the company's $34M seed round alongside the Daily Mail Group, David Blitzer, and Simon Sports ahead of the London launch in Q1 2026, followed by U.S. openings, international franchising, and white-label tech deployments.
Team: Led by Steve and Dave Jolliffe (TopGolf, Puttshack) and Paul Hawkins (Hawk-Eye), supported by nine senior executives from F1 Arcade, Swingers, TopGolf, Flight Club, and Puttshack.
The memo closes with the Poolhouse logo
Sharp Alpha
It also includes a legal disclaimer
Sharp Alpha