Sportswear startup ONTHEGO teams up with Wesfarmers: Founder Mick Spencer on life after Shark Tank
Wednesday, June 6, 2018/
He’s gone from selling custom T-shirts from a garage to partnering with a Wesfarmers subsidiary, with a stop-off at Network Ten’s Shark Tank along the way, but ONTHEGO founder Mick Spencer says “nothing’s really changed”.
When Spencer appeared on Shark Tank in 2016, he was offered $600,000, double what he originally asked for, for 30% of his online custom sportswear company. Ultimately, however, he turned the deal down — a decision he says he “thankful for” now.
At the time, he valued his business at $3 million. Speaking to StartupSmart, he says it’s now valued at 10 to 15 times that, although he declined to reveal an exact figure because of commercial sensitivity.
Over the past couple of years, Spencer says “our technology infrastructure has grown quite strong”.
There has been a focus on improving connectivity to manufacturers, commercialising the in-store ‘design-your-own’ product, and ONTHEGO has signed some “pretty substantial customers”, Spencer says. The team has also grow from eight or nine people to about 35.
The company has this week announced a partnership with Workwear Group, a subsidiary of retail giant Wesfarmers, which has acquired an equity stake in ONTHEGO to form a joint venture in uniform design and distribution.
Through the partnership, Workwear Group will white label ONTHEGO software, making customised uniforms and other workwear products available via a new platform called NNT Customised.
Again, the exact figures are undisclosed, but Spencer says the Workwear equity stake, plus holdings by some additional stakeholders, total “no greater than 10%”.
“Some key staff have been able to earn some shares,” he adds, while clarifying that he has retained the majority shareholding.
According to Fairfax, Wesfarmers has taken a 5% stake in ONTHEGO, and Spencer is quoted as saying the joint venture deal will take ONTHEGO’s revenues to more than $10 million a year.
For Spencer, the part-acquisition is “not meaningful enough for us to change our ways”.
“It won’t really change what we do too much,” he says. “We’re passionate about what we do, and that won’t change.”
Rather, for ONTHEGO, the deal provides an “opportunity to grow and evolve”.
Spencer says he was conscious that any partner had to be “the right fit”, but came to the conclusion that working with a large company will help the ONTHEGO mature, in terms of supply chain, the team, and its reputation, while also bringing the ability to scale.
“It also widen us up to the greater Wesfarmers network,” he says.
“They’re a pretty tight-knit group … we can genuinely learn a lot from them.”
Another aspect Spencer was conscious about was the career opportunities a partnership could bring for his team — the part of the business he says he is “most proud of”.
“This isn’t just a Mick story anymore,” he says.
For Workwear, ONTHEGO brings a customisation platform built specifically for them, and a “very nimble” business model.
According to Spencer, Workwear was considering introducing customisation itself, but “realised the challenges a large business like them would face doing it themselves”.
“We could either work together of compete against each other,” he says.
Spencer says he has always had big ambitions, and has no intention of slowing down now.
He describes himself as “humble but hungry”, and says success is about “having that weird thought that you might end up there and setting the bar higher”.
“In 2012, when the company started, I was in the garage selling custom T-shirts, and nothing’s really changed,” he says.
“I always had big ambitions. I thought big things would happen … if we focused on the right things.”
Over the next three to five years, Spencer says the business will focus on building “the best company we can”.
A lot of this lies in international expansion, growing the core online business, and “nailing our in-store experience”.
“If we do that, we will have a lot of choices,” he says.