It was literally an elevator pitch that culminated in the recent tweets from Shailendra J Singh, Managing Director of Sequoia Capital (India) Singapore Pte. Ltd.
— Shailendra J Singh (@singh_sequoia) July 20, 2017
amazing when VC's can find a business they're passionate about, a founder whose values align, a company whose culture is inspiring 🙏🙏🙏 https://t.co/2p8E0307pR
— Shailendra J Singh (@singh_sequoia) July 20, 2017
A chat with an investment banker while waiting for the elevator had got Singh interested in Chatri Sityodtong’s story and the ONE Championship journey.
For ONE Championship chairman and CEO Chatri Sityodtong, it has been a remarkable journey from poverty to a career on Wall Street, running his own hedge fund, entrepreneurship and following his passion with ONE.
“We have arguably the most blue-chip institutional shareholder base in all of Asia for a sports media property. We have raised $100 million in total so far,” says the 46-year old Sityodtong (who is known by his first name), when asked about the latest investment round that was led by Sequoia.
The latest investment comes within months of ONE Championship, the mixed martial arts (MMA) competition that Chatri founded in 2011, raising an undisclosed amount from a unit of Temasek, the city-state’s investment fund.
Chatri, who is deeply passionate about martial arts and practices the sport every day, says investors were attracted to the ONE story for the potential it holds to become the biggest and most lucrative sporting spectacle in Asia, rather than its current numbers, matrices or revenues.
“Sequoia invested in us because they believe digital media is going to be massive. Live sport content is absolutely critical to creating communities. People want to be associated with it – they want to wear the brand. The way I think of ONE, we are content owners. My job is to make the content as ubiquitous as possible – on TV, laptops, mobile devices, and every platform,” he explained.
Part of that potential is reflected in its numbers.
“On an event basis, we are very close to profitability. I believe we will cross the billion-dollar valuation mark in the next 12 months. But the numbers I care about most is audience reach and audience engagement because that will eventually drive all future revenues. From 300,000 video views on social media three years ago, this year we will see a billion video views, and as a media property that is very significant,” he adds.
ONE’s revenues, which Chatri said were in eight figures, come from media rights, sponsorships and in-product placements in its videos. It is now set to open its merchandise store in Q4.
“We have a lot of rabid fans that want to buy our merchandise and be a part of the experience,” Chatri adds.
Its MMA fights are now available on free-to-air TV or pay TV in over 128 countries.
“In our genre of media, views are very important and TV ratings are very important. The reason why let’s say the NFL (National Football League in US) or Super Bowl (annual championship game of NFL) is the biggest event for TV is because they have one hundred million households watching live concurrently,” Chatri explained.
The landscape is rapidly changing as sporting events attract massive interest from internet firms. According to Chatri, Amazon’s recent move to pay tens of millions to stream NFL was a game changer and a business model that Asian internet unicorns could emulate.
“You are going to see Lazada, Alibaba, Tencent, and Rakuten all hungry for content – they don’t want just a transactional site anymore. They are creating ecosystems and communities, and this is a huge shift. Content is absolutely essential and critical to form a community,” he said.
While the Sequoia-led $50 million investment round should give the 200-member company ‘significant runway’, Chatri sees ONE Championship raising a much larger round within the next 12 months riding on interest from potential investors.
For his investors, Chatri is of the view that an exit opportunity would come in the form of a listing, adding the company is being built with an IPO in mind. “We want ONE Championship to list on a major stock exchange as Asia’s first multi-billion-dollar sports media property. I also really want to reward my team and my institutional shareholders who have been with me,” he added.
Chatri credits martial arts for installing the ‘warrior spirit’ that enabled him to conquer adversity.
In a recent LinkedIn post, Chatri said, “Through the practice of martial arts, we inherit confidence, mental strength, courage, tenacity, work ethic, humility, compassion, integrity, kindness, respect, honor, discipline, and much more… Above all though, martial arts empowers us with an unbreakable warrior spirit to conquer adversity in life… Martial arts has the incredible ability to change lives, to turn weakness into strength, to mold fear into courage, and to transform the ordinary into the extraordinary.”
Chatri grew up in Bangkok, Thailand, and his comfortable life was turned upside down when the financial crisis hit Southeast Asia in the 90s.
His Thai architect father and Japanese mother had met in Japan during the former’s university days. Soon after, the family moved back to Bangkok where his father ran his own real estate company.
“Rewind twenty years, and my father went bankrupt – he left the family, and we were left homeless and dirt poor, often surviving on a meal a day,” he recounts.
As a teenager, he learnt Muay Thai (a form of martial arts) under the revered Yodtong Senanan in Pattaya’s Sityodtong Camp, and also competed on the martial arts circuit for some time. Chatri whose surname is Trisiripisal changed it to Sityodtong, the name given to him by Senanan.
Pressure from his mother led to him applying to Harvard Business School after graduating in economics from Tufts University.
“I got lucky in getting to Harvard. But I was still scared. I had no money. The discipline of thousands and thousands of hours of learning and practicing martial arts made me a fighter,” he said. “I did odd jobs, the scholarships helped with the fee part, and there was a Korean buffet outlet that cost around three dollars, that got me through university,” he added.
With no home in Bangkok, his mother came to live with him in the university dormitory.
He got his first break when the internet company Nextdoor Networks he co-founded raised $0.5 million in angel funding, and then raised about $40 million in venture capital funding.
On exiting Nextdoor (which was eventually acquired by Oracle), Chatri spent over a decade on Wall Street, with stints at Fidelity Investments and Bain and Company, before becoming the managing director at Maverick Capital, a $12 billion hedge fund. He then launched his own hedge fund, Izara Capital Management, backed by Farallon Capital.
A career in Wall Street had left him wealthy, but even a record year in terms of the fund’s performance, left him yearning to do more.
Realising that Asia had yet to create sports content with a global appeal, he left New York to launch ONE Championship in Southeast Asia.
He decided that there was a business case for martial arts, which he calls his ‘greatest passion’, to be enjoyed by a global audience.
“Again, if not for the discipline of martial arts, I would have quit multiple times within the first three years of launching One Championship. My mother thought I was crazy to leave a career on Wall Street,” he said.
The business case for ONE involved exploiting a gap as ‘Asia lacked local sports heroes’.
“You walk around this region and ask people who their favourite teams/players are and they hear things like Arsenal, Manchester United, Barcelona, David Beckham and Cristiano Ronaldo. But that has nothing to do with Asia. Nothing. Human beings in nature are tribal. They want to root for people who come from the same background and share the same values and culture. They want to root for people that look like them and think like them and act like them,” he said.
“Asia has been practising martial arts for over 5,000 years. There is a unique martial art in every single country. Karate in Japan, Taekwondo in Korea, Kung Fu in China, Muay Thai in Thailand, Silat in Indonesia… Martial arts is part of the history and cultural tradition of Asia. Actually, it is Asia’s greatest cultural treasure. Who are the biggest movie heroes? Any genre? Jackie Chan. Bruce Lee. Jet Lee. All martial artists. I think, 4.4 billion people will be fans of (ONE). ONE is a celebration of Asia’s greatest cultural treasure,” he added.
The first ONE Championship fight kicked off in September 2011 at the Singapore Indoor Stadium.
Six months later, ONE had its first female fight, again at the Singapore Indoor Stadium between Nicole and Jeet Toshi. The brand got a major boost in June 2012, when it managed to sign two of the biggest names in Asian MMA – reigning Dream (mixed martial arts) champions Shinya Aoki and Bibiano Fernandes – on long-term deals.
The launch of ONE Championship was also the time that MMA, where fighters are allowed to strike, box and grapple, was seeing an increased following globally.
The sport that began in 1993 now has globalized rules. Last year saw the biggest deal in this space when Las Vegas casino owners Fertitta brothers sold the Ultimate Fighting Championship (UFC) brand to a consortium headed by Hollywood WME-IMG for around $4 billion.
With ONE Championship, Chatri said that there was no one occasion that could be termed as a big break, and growth was an arduous process. “One broadcaster gave us a chance. Another gave us a few hours. One sponsored and gave us a few dollars. It slowly built. Then I got a random email last April from Temasek. I actually turned them down and said I am not raising money. We ended up having coffee and six weeks later, they invested in us.”
Before Temasek, Charti’s biggest backer had been Saurabh Mittal, the founder and chairman of Mission Holdings and former vice-chairman and co-founder of Indiabulls.
“Saurabh is my best friend from Harvard. We have remained close friends through the last twenty years,” Chatri added.
ONE Championship is rapidly expanding, and hiring key talent will be critical to its success. Chatri says the company provides an attractive proposition to its employees to ‘create history and be a part of history’ by building Asia’s first multi-billion sports property.
But what about the Indian Premier League (IPL)? Chatri says IPL is massive in India but hardly had an audience outside the Indian diaspora.
“Look at NBA in the US. Everyone in the world knows NBA. The brand itself has permeated across the world,” he added.
Chatri, who appears to have a penchant for numbers, says TV ratings show ONE Championship is ahead of NBA, IPL and FI on a pan-Asia basis. “We are number one or two in every country in terms of our TV ratings for a sports brand. We have live events in 14 countries and we are increasing that footprint as we speak,” he added.
His plans for ONE include 52 events annually, translating to a series of fights in one major Asian city every weekend, and making that content available on mobile first. “Viewers should go ‘I watch it on TV, mobile, and hey, these guys are in my own city’,” he explained.
With each Asian country having preferences for a particular form of martial arts, Chatri is confident ONE can unify this, and adds that martial artists across platforms did not find it a challenge to compete under standardized MMA rules.
ONE currently has over 350 fighters, and offices across all major Asian cities. It organizes fights across most countries in this region from Indonesia to Myanmar and China.
Unlike other sports, ONE benefits from a strong talent pipeline created by the existing infrastructure across the region. Chatri pointed out that there were tens of thousands of martial arts gyms across Asia, many of them driving martial artists to local competitions. It is this pipeline that ONE is looking at to identify and sign up the best talent.
“The reason why cricket has not taken off in Indonesia or Thailand is that there are no grounds to play the game. Even basketball has not taken off here despite many watching the NBA because the infrastructure is not there at the school level,” he added.
Initially, ONE held many of its events on Friday nights to avoid clashes with other sport that TV audiences followed over the weekends. Over time, the brand has achieved a position where it is able to command weekend slots with major broadcasters.
About 32% of its viewership audience is female, which Chatri says is a healthy number
ONE sees engagement on mobile increasing. Chatri attributes this to the short duration of the fights, compared to a minimum of 90 minutes for a football match.
“We are lucky because it is short, exciting and entertaining. You don’t know how it will end – whether by knockout or submission. It is a cliffhanger,” he added.
Its top athletes make ‘seven figure dollar amounts’ annually, and Chatri said the brand was fast reaching an inflection point where its popular fighters were becoming household names.
He points to Angela Lee, ONE Women’s Atomweight World Champion, who is a household name in Singapore and is now becoming a global phenomenon.
How does ONE Championship differentiate itself from the UFC? They (UFC) are the global leaders in the MMA space and they are expanding to Asia.
UFC has been trying to expand for the last nine years in Asia, but they have failed. The DNA of both companies is diametrically opposite – one hundred and eighty degrees different. It has become a global duopoly. UFC dominates the western hemisphere and ONE Championship dominates the east. UFC focuses on blood, violence, disrespect, controversy, hatred and anger between the fighters – their entire marketing efforts are focused on the fight. They are selling fights.
ONE Championship is a true celebration of martial arts. We are focused on unleashing amazing life stories of our world champions who come from poverty and adversity to rise and become the best in the world at what they do. We showcase that whole story. When Manny Pacquiao fights, 100 million people in the Philippines stop and watch. He can be president of Philippines one day and the reason is people can relate to his life story of being a street kid in Manila and rising by sheer hard work, guts and courage to become world champion. We are not focused on the fighter, blood or violence. We are focused on real, authentic, true martial arts, and we are focused on the Asian values of integrity, humility, kindness, courage, strength, honour and respect.
Who do Asians admire? Jackie Chan, Bruce Lee, Jet Lee, Donnie Yen – these are unbelievable martial artists, but they all come across as kind, gentle, and humble. Look at the language of UFC fighters. Asians don’t speak like that. Asia is not about arrogance, brashness, swearing and disrespecting other people’s families.
We have exclusive contracts with all of our athletes. We have already locked up 90% of the best fighters in Asia. I would love to see ONE Championship vs UFC. That would be great – East vs West – and these fights would be the biggest show. So far, they (UFC) have not accepted my invitation on this.
Question: Apart from TV rights, how do you plan to monetize?
Branded merchandise will be a massive business for us. There are 4.4 billion people in Asia. If only 5% of the population were to buy one $10 t-shirt, that is $2 billion. That is just merchandise – this is not media rights or sponsorship rights. Our media revenue potential is massive. I believe ONE Championship has the potential to become a $10-30 billion opportunity. Then there is advertising, merchandising, brand licensing, ticket sales, and the list goes on. Look at Star Wars – they’ve built a massive franchise from movies and toys.
You will also see some big news coming out of ONE Championship on media rights because when your TV ratings are strong, the broadcasters will pay. We are also set to launch our branded gyms across this region. We have been approached by video games manufacturers – we don’t have the resources right now but eventually, we will enter that space.
In the next stage, we will have our own OTT platform which will house all of our archives and special content for a subscription fee. This will enable users to engage with our fighters, our content and our brand.
Question: You are a TEDx speaker, and you also do a lot of motivational talks. What is the message that you are trying to convey?
I believe all human beings have fears, doubts, and insecurities. It doesn’t matter if you are a billionaire or the poorest pauper. Our duty as human beings is to overcome those fears, doubts, and insecurities to listen to our dreams and our passions so we can unleash our potential and give back to the world more than we received. Ultimately, if every human being can leave this world better than how they entered it, then the world will be become a better place over time and humanity will win. My name in Thai – Chatri – means warrior. If there is one thing I would love to share with everybody, it is that you have to be a warrior in life. You have to fight for your dreams, your family, your beliefs and for your values. If I could spread one message – learn to be a warrior in life and all your dreams will come true.
A shorter version of the story was first published in livemint.com