When Matt Rum worked at Square on developing Cash App, he and his coworkers played a lot of golf on the weekends. They were all competitive, the former college basketball player said, so they started putting money on rounds.
But keeping track of multiple games on paper scorecards and divvying up bets at the end of the day became difficult. So Rum and his cofounder, Thomas Reinholm, built the initial prototype for the on-course betting platform that eventually became LoopGolf.
In 2021, Rum and Reinholm quit their jobs and turned LoopGolf from a weekend hobby into a company. They raised close to $2 million through venture-capital investment.
This summer was the company’s first season with its product in the App Store. Rum said LoopGolf acquired about 7,000 customers and did about $250,000 in gross payment volume, meaning money flowing in and out of the betting platform. Customers can connect with friends to bet on rounds and transfer money in the app, and the product also has an on-course GPS using satellite technology.
When it’s time to play, users select the course, set the stakes, and invite their partners to join the match on the app. Players update their score throughout the round, and once it ends, the app instantly distributes funds between LoopGolf wallets.
“Really exciting first summer for us,” Rum told Insider. “Really validating that it’s not just us that have these problems and showcasing that the product is valuable to a lot of golfers.”
Appealing to a younger generation of golfers
The company didn’t have a lot of money to spend on marketing, but it hired a young golfer to help make content for social media. He hadn’t done this kind of work before, Rum said, but his creative videos found the right audience.
“We’ve kind of struck gold,” Rum said. “We’d have a couple that have gone viral, and have acquired 4,000 or 5,000 customers via TikTok alone.”
Three of the videos have gotten hundreds of thousands of views, and the company now has almost 7,000 TikTok followers. The app’s demographic is primarily ages 21 to 35, Rum said. Part of that is because of TikTok, but it’s also because older golfers are more resistant to changes in their golf game, he added.
“They have a way of doing things out on the golf course and they don’t necessarily want to incorporate technology,” Rum said.
LoopGolf recently added golf creator Mike Bartels, who has nearly 12,000 Instagram followers, to its team.
Rum said the multiplayer experience has also helped drive customers toward the app because users are incentivized to get their friends to sign up.
“To get the most value out of your app, you want your friends on it,” Rum said. “We’re benefiting from that word-of-mouth marketing, and I don’t think a lot of the sports betting operators have that same luxury.”
Getting creative and scrappy with fundraising efforts
After quitting their jobs at Square in 2021, Rum and Reinholm fundraised about $2 million from VCs to build their app. But as investments have slowed in 2023, especially for sports gambling startups and high-risk, early-stage companies, LoopGolf needed to find another way to stay afloat.
“We were striking out left and right” with VCs, Rum said.
The team turned in August to the community they’d built through their weekly newsletter, The Sunday Sweat, offering the chance to be a stakeholder in the company. The effort raised about $50,000 to help fuel product development and growth.
Here’s the fundraising message the team sent at the top of their newsletter:
We’ve been receiving a lot of interest lately from our community regarding how to invest in LoopGolf and we wanted to take this opportunity to make an announcement. First off, we’re greatly humbled by this level of interest and the thought of having a super engaged community with some skin in the game is greatly appealing to us.
Given that many of you are new here, we felt like it is a great time to share our full vision to build golf’s first real money super app — where gaming, fintech and e-commerce intersect to create a one-stop shop for golfers. Here is our vision deck.
So with that in mind, we’re are wrapping up our first round of fundraising this month and have reserved the last $50,000 for you! We are giving 50 members the opportunity to invest a $1,000 each by the end of this month. If you or anyone you know is interested in having some skin in the game, please reach out to Matt Rum at [email protected]
“It’s been a really fun and rewarding, a very challenging year,” Rum said. “But it’s forced us to get really creative and really scrappy.”
Rum said he wants to restructure the business so it can fund itself and doesn’t rely on incoming capital for growth. He said he thinks more small businesses are going to shift to a profitable model earlier than usual given the difficult funding environment. He also mentioned looking to one day partner with a sportsbook to draw in a bigger audience.
Here are LoopGolf’s updated pitch deck slides that the company uses for interested venture capital firms and community members:
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