Virgin Experience Days' US ambition realised

Virgin Experience Days (VED) was transformed in its nearly five-year partnership with Inflexion, more than doubling its revenues in that period. Serial Chair in the consumer space Simon McMurtrie discusses the accomplishments of VED’s leadership team as it transformed from acorns to oaks.

What are you most proud of in VED’s five years of growth with you and Inflexion?

VED was a textbook example of a small profitable growing business which had far greater potential than the then management understood or indeed had the skills to exploit. We bought its predecessor in 2017 seeing a tremendous opportunity to put in place significant changes to turbo charge growth.

The combination of the Virgin brand, the outstanding Exec team led by the new CEO and relentless focus with rock solid alignment with Tom Pemberton and James Stevens (the Inflexion deal team) are the three things I’m most proud of.

There was agreement that the right leadership team, a strong focus on customer and marketing, substantially improved technology and a “can do” attitude in all areas of the business would create real opportunity for scale.

Having previously been Chair of Virgin Wines, I was lucky to have good connections in the Virgin Group and I was confident that, properly exploited, the Virgin brand should be at the heart of growing the customer base and the business. Five years later, over 90% of VED’s activity is Virgin branded.

What were the first steps you took to launch the growth plan?

Having decided together with the Inflexion team that we should focus on building the Virgin-branded business, our top priority was to put in place the right management team, ensuring a smooth transition away from the existing management, all of whom were clear and quite understanding about not having the necessary skills and experience to grow the business much more rapidly.

The scale of Inflexion today means that the Inflexion network is unparalleled in the mid-market. This was key to building out the leadership team, and we had excellent support from Inflexion’s Talent team.

Richard Hurd-Wood had been COO of Reward Gateway, a highly successful Inflexion investment from 2010-2015. Richard was keen to continue working with Inflexion, and our excellent personal chemistry meant he was delighted to come on board. Ultimately his input proved instrumental in VED’s success, while his experience in-sourcing tech and getting tech teams to work with marketing and operations proved incredibly helpful. He was also a strong driving force in expanding the business into the US, more of which later.

Josh Pert was known to Inflexion as one of its Digital Associates (an important network of tech-savvy talent, working formally and informally to advance the digital and technology capabilities of the Inflexion portfolio companies) and joined as CTO, with responsibility for in-sourcing the tech function.

Three strong external hires (Christian Jennings as CFO, Danni Rush now as COO and Dan Pearce as CMO) completed the Exec Team.

A big development for VED in the last five years was its launch into the US. How was this achieved?

All of the team believed that once we had got our thinking straight around the UK and were starting to experience the growth rates and increased margins that we all believed were possible, we should turn our attention to international expansion. Unbelievably there isn’t currently a business of scale in the US providing a similar breadth of gift experiences as VED.

There were a number of smaller players in the market and we quickly identified Cloud 9 Living as remarkably similar to the old VED business – privately held, well regarded, slow growth and a lack of in-house tech and marketing skills. We formed an excellent relationship with the two brothers that owned the business and working closely as a board (Tom, James, Richard, Christian and me), we had the courage to pursue an acquisition in March 2021 – when the world was still in the throes of Covid – as we were very confident that VED would be a post-pandemic winner, with consumers desperate to get out and about and start living their lives again and gifting experiences to their friends and relatives.

The growth in the US since that point has been outstanding, much of which is down to the team knowing the playbook that needed to be followed from our experience with the original VED business. As Virgin is well recognised in the US as well, the business has been rebranded as Virgin Experience Gifts and we’ve already launched experiences further afield and at different price points.

What will drive VED’s future growth?

The UK and US businesses are both now growing very well, together offering more than 4,000 experiences and with Equistone confident of its future potential. Unsurprisingly, Inflexion were keen to re-invest as a minority investor to take advantage of the new chapter in the VED success story.

VED’s growth will be driven by its established UK platform, which is continuing to grow at 20%+ and a rapidly growing US business – which accounted for a little over a tenth of the Group’s revenue but had grown at 50%+ in its first year with VED.

The stateside growth opportunity is clear: expanding the offering to new verticals as well as new states. As a Colorado-focused business offering high-value adrenaline experiences, there remain many untapped states to explore and new gift experiences to offer, such as spa days and dining out – both core to the UK business’s success. As the UK team understands this extremely well, there is ample scope to support the US team in sourcing new experiences at different price points.

Better use of tech in the US will be invaluable, with the VED software imported efficiently post-acquisition to shift the business to self-service – already at the core of the UK market. This freed up resources internally to be part of the growth story ahead.

There is also a growing ESG focus as consumers increasingly demand this, and Inflexion’s Jennie Galbraith was great here; starting to help the VED Exec team even before she formally joined Inflexion.

VED went from being a single-country business to an international one and it’s clear other countries can be added in time. The re-platforming and investment in digital technology of the business is enabling not just US and UK growth but further territories in the future, and that’s very important.