Alan Flatt interview: US padel investor on launching new firm to fund eco-friendly clubs

Recognised as an early leader in the US padel industry after investing in New York’s first padel club and LA’s Pro Padel League franchise, Alan Flatt has set up a new firm to provide venture capital to operators in padel and other emerging sports, and to invest in the underlying commercial real estate, with a commitment to environmental sustainability. He speaks to Padel Business Magazine about InvestTrek Capital’s new funds and future plans.

With extensive experience in finance, corporate real estate and hospitality, and a passion for environmental sustainability, Alan Flatt is on a mission to make a major contribution to the development of the nascent padel industry in the US.

After holding senior positions at major financial institutions including Bank of America Merrill Lynch and Wells Fargo, and with a heavy focus on lending to commercial real estate firms, the American business executive left in 2020 to invest in destination hospitality and experiential travel with a long-time banking client. 

Then in 2022, after a phone call from a friend, Philip Siberg, who had recently moved back to his native Sweden, Flatt made his first move into padel through EEP Capital, a venture capital firm he co-founded with Siberg among others. With backing from a group of Swedish NHL players, it became the first fund to invest in padel in the US.

In December 2022, EEP completed its initial investment, in Padel Haus, New York’s first padel club. Padel Haus has since expanded to three sites in Brooklyn, with three more due to open, in Brooklyn, Nashville and Denver in the coming months.

EEP went on to invest in four other padel companies – Ace Padel, Bay Padel, Park Padel, and Racquet 360, as well as LA’s Pro Padel League franchise, the Los Angeles Beat, launched in April 2023. 

Flatt departed EEP in December 2023 with the passion to start his own investment platform, InvestTrek Capital, which is based in Orange County, California. He founded the firm in January 2024 alongside three other experienced business executives – Hans Helmers, Brian Calvert and Jason Belice. InvestTrek launched two funds last month, designed to provide venture capital to early-stage emerging sports and fitness enterprises, and to invest in the underlying commercial real estate.

Talks underway over first property acquisition in Philadelphia

Flatt describes InvestTrek as an “opportunistic investment firm” focused on delivering results through early mover investing in padel and other consumer sports, as well as in the fitness and wellness sectors.

“We saw the opportunity on the venture capital side and on the real estate side, and so we think of it as a ‘PropCo, OpCo’ [property company, operating company] strategy, where we're investing in the operating company and letting expert operators run the clubs,” he explains.

“We don't want to be an operator, but we like the idea of, when possible, owning the real estate and then leasing it to the operators, which has been a huge impediment in the industry in general – we know it's hard to find space.”

Flatt reveals that InvestTrek is currently in discussions over its first property acquisition, a site in Philadelphia it plans to lease to a padel startup for the construction of five padel and two pickleball courts, all indoors.

The firm is also eyeing other opportunities across the US with the goal to develop underutilised assets, adding value to local communities and individuals. 

InvestTrek is currently raising funds for the venture capital business as well as individual real estate projects and Flatt says he sees huge potential in padel and other emerging consumer sports, including other racquet sports, football/soccer, indoor golf and youth sports facilities.

“We think there is now a golden opportunity for investing in consumer sports. Given the growth of wellness and experiential fitness, we think this is a unique moment in time to invest in companies that have this growth potential.”

Eyeing investment in select number of padel clubs

Nevertheless, Flatt stresses that InvestTrek is taking a discerning approach when deciding which companies to invest in. “Our goal is to invest in a select number of, say, five to ten clubs and really nurture the ones that are succeeding. So as they grow, we can provide the startup seed funding and then Series A and Series B funding. 

“We’re open to investing in new padel clubs and ones that are already established, and we're indifferent to where their price point is. We're really looking more at the operator and the business plan, the strength of their brand, how they differentiate themselves, and how they can keep competition from eroding their rates.”

He adds: “We don't see us investing in every padel operator in the US. We believe that is not the greatest strategy, because there'd be too much competition within our portfolio companies. There'll be too many in one region. We want to selectively invest in what we think are the best of the best, and then continue to invest in them as they grow.”

Flatt reveals that in addition to clubs, InvestTrek is also looking to invest in other companies involved in padel and other emerging consumer sports, and has set aside up to 20% of the fund for sports-related technology firms.

He says that further down the line InvestTrek is planning to pursue opportunities beyond the US.

“We believe we're building a platform that can be scalable, that we can grow in the market, and that can pivot in different directions,” he explains. “Currently, we're only focused on the US, but we expect that as we grow and we have more resources we could take on projects in other countries.”

Targeting low-hanging fruit for environmental improvements

As it targets growth and expansion in line with the rise of padel and other consumer sports, a key aim for InvestTrek is also to develop facilities that are environmentally sustainable – a topic Flatt feels strongly about as the effects of climate change become increasingly evident in the US and elsewhere.

“Sustainability for us is really about resource management and making sure we're careful around our buildings and we're thinking about the resources that go into them in terms of energy, water and carbon,” he says.

“So we're looking for materials to build with that are more sustainable, and we're very keenly focused on things like net zero energy over a ten-year time frame.”

He suggests there are several ways of ensuring padel facilities are eco-friendly while also enhancing the player experience.

“We can see there is low-hanging fruit, like building facilities made from mass timber rather than steel, or heating large spaces, where you're only heating the court area, or using radiant heat from below the court. There are ways to create player experiences that are very positive without excess heating or cooling. There's ways of flushing buildings at night to bring in the cool air. There's a lot that can be done through basic operating practices."

He adds that the way courts are covered can also have an impact. “With a pavilion, if you have a canvas covering, rather than a fixed roof, where the light comes through, it saves a lot of energy,” he explains, adding that such a construction can also enhance the user experience.

“If you have natural light coming in during the day, it's a lot more interesting for playing padel than being under artificial light. And then as the daylight dims, you can turn on your lights, but still create an experience that is pleasurable to play in.

“So it's really about finding an opportunity to use spaces where we can be really thoughtful about the resources we're using, whether it's an existing building or a new building.”

Deep challenges around establishing eco practices in the US

However, with generating revenue and getting a return on their investment the number one priority for new entrants in emerging sports such as padel, Flatt acknowledges that driving change around environmental sustainability will be a significant challenge – especially in the US, which he observes is in many ways behind Europe when it comes to green consumer habits.

“Europeans are perhaps more comfortable in a variety of spaces and temperatures, whereas in the US people are by and large used to a 68°F or 70°F air-conditioned space that's the same temperature year-around. So we have a long way to go to catch up in some respects to practices that are more standard in Europe.”

He adds: “This will take time. It won't happen overnight. And we'll see - the consumer here will either buy in or they won't. We don't know yet how it'll all play out exactly, but we're going to have the best engineers, the best designers, we're going to have the right people looking at these things and based on the conversations we've had I'm pretty confident we can do it.”

Huge opportunity for padel in the US if enough courts can be built

Whether environmental sustainability is embraced widely by padel clubs or not, Flatt is excited by the opportunities for the sport in the US, but stresses that far more facilities need to open up for its potential to be realised and for it to become well-established over the long-term.

“I think the sport has legs and people will continue playing, so it is sustainable in terms of a business plan, but I think there's certain things that have to happen first. There needs to be enough places to play. I have to drive at least 40 minutes to go and play padel, for example, and most people won't do that.

“We need enough courts where people can actually play locally, more like it is in New York, where there are enough courts for it to have become a thing certainly among young professionals, and also in Miami, where there are also enough places to play for it to be popular.”

He adds: “The US is a fragmented market. Consumers here like to do a lot of different things. Running clubs have become a hugely popular activity, for example. They've always been around, but all of a sudden their popularity is taking off. So in the US there will always be a large number of things to do. We have a very wide range of activities and we have to find a place.

“We know that padel will not be something for everybody, but we think it will be something for enough people in a country of 330-340 million people. If 10% of the people are playing it even somewhat regularly, that's a huge number, and could dwarf even what's happened in Spain or elsewhere. So that's really the opportunity.”

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