NewSpring Capital has made an investment in Toronto-based Blo Blow Dry Bar, a blow dry bar franchise. No financial terms were disclosed. The proceeds will support the company’s goal of opening 300 new locations over the next five years. As part of the deal, NewSpring general partners Satya Ponnuru and Patrick Sugrue will join Blo Blow Dry Bar’s board of directors.
RADNOR, PA – March 18, 2021 – NewSpring (the “Firm”), a family of private equity strategies, today announced that NewSpring Franchise, the Firm’s newest strategy focused on investing in innovative franchise and multi-unit concepts, has invested in Blo Blow Dry Bar (Blo), North America’s original blow dry bar and the world’s largest blow dry bar franchise. The investment represents the first deal made by NewSpring Franchise.
“The investment in Blo Blow Dry Bar is a landmark for NewSpring as it represents the first deal in our newly formed franchise portfolio,” said Patrick Sugrue, NewSpring General Partner. “Our extensive diligence on the business revealed the strong combination of a unique concept in a high-growth sector with increasing demand, healthy income potential for its franchise partners, and a strong management team. We’re thrilled to launch the Franchise strategy with such an exciting investment and look forward to leveraging the Firm’s wealth of knowledge, experience, and resources to support many more multi-unit businesses.”
Blo represents exactly the type of multi-unit business NewSpring Franchise targets for investment. As a leading personal care franchise brand specializing in blow outs, as well as other signature hair and makeup services, Blo currently operates over 100 units with more in development across the United States and Canada. The company’s proven ability to expand in 26 states and internationally validates the business model’s portability and scalability. Led by an innovative, growth-oriented leadership team, Blo has significant opportunity for continued franchise unit development in existing and new markets considering the growing demand for blow dry bar services and the favorable unit-level economics for Blo franchisees.
NewSpring Franchise seeks to further invest in capital-efficient, consumer-facing, multi-unit businesses with proven unit-level economics, real cash flows, and strong management teams. With a disproportionate amount of growth opportunity in the multi-unit brand industry at the lower end of the market and favorably shifting market dynamics, NewSpring’s active investment and operating value-add approach is well-positioned to help franchises accelerate growth.
The launch of this new strategy is a natural extension of the Firm’s mission to support a range of capital needs often experienced by businesses in the highly fragmented, and often underserved lower-middle market. Having successfully partnered with over 160 businesses in this market segment over 20 years, this horizontal growth and expanded sector focus allows NewSpring’s team of operational and investment experts to effectively serve a wider range of growing middle-market companies.
“The U.S. middle class leans heavily on franchise businesses throughout their daily lives, and with household disposable incomes increasing, we see this trend accelerating as multi-unit companies further embed themselves in the lives of this demographic. These consumer trends are driving significant opportunity for rapid expansion and revenue growth for multi-unit companies in the lower-middle-market,” said Satya Ponnuru, NewSpring General Partner. “Blo is primed to capitalize on these favorable market dynamics and we couldn’t be more excited for this partnership.”
NewSpring Franchise is led by Satya Ponnuru and Patrick Sugrue. Patrick brings over 25 years of C-level operating and consulting experience at several national franchise brands. Over the last 15 years, Satya has focused on sourcing, investment execution, and oversight of lower-middle-market multi-unit businesses. These two will leverage their complementary skill sets coupled with the combined capabilities of NewSpring’s firmwide resources to find attractive opportunities for investment while working closely with existing portfolio companies to help them grow.
“The investment from NewSpring is a testament to Blo’s distinct brand, our proven success, and the strong growth potential in the blow dry bar category across North America and internationally,” said Vanessa Yakobson, CEO of Blo Blow Dry Bar. “Blo has experienced significant growth since its inception in 2007. With this partnership, we are positioned for major expansion in both existing and new markets, while we make strategic investments to bolster our brand and systems.”
As part of the transaction, NewSpring General Partners Satya Ponnuru and Patrick Sugrue will join the Blo Blow Dry Bar Board of Directors.
NewSpring partners with the innovators, makers, and operators of high-performing companies in dynamic industries to catalyze new growth and seize compelling opportunities. The Firm manages over $2.0 billion across five distinct strategies covering the spectrum from growth equity and control buyouts to mezzanine debt. Having invested in over 170 companies, NewSpring brings a wealth of knowledge, experience, and resources to take growing companies to the next level and beyond. Partnering with management teams to help develop their businesses into market leaders, NewSpring identifies opportunities and builds relationships using its network of industry leaders and influencers across a wide array of operational areas and industries. To learn more, visit www.newspringcapital.com.
About Blo Blow Dry Bar
Blo Blow Dry Bar is North America’s original blow dry bar and the world’s largest blow dry bar franchise. The company transformed beauty norms and reinvented the salon industry when it launched the “no cuts, no color” concept: only blow outs. Since opening its first location in Canada in 2007, Blo has grown to over 130 locations across the U.S and Canada and continues to expand rapidly. With a mission to enhance the lives of those in the community through the power of flawless blow outs and beauty services, Blo Blow Dry Bar offers perfectly styled hair and exceptional customer experiences seven days a week. For more information visit www.blomedry.com.