Image Source: Forbes
The world of YouTube influencers is booming, and it's no surprise that some of these creators are on their way to becoming billionaires. While MrBeast has made headlines for his impressive revenue of $82 million, there are two other contenders who may surpass him in the race to become the first YouTube billionaire: Logan Paul and KSI.
What sets Logan Paul and KSI apart is their involvement in sports drink Prime. With its rapid growth, Prime could be valued at an astounding $3.1 billion to $8.4 billion, potentially making both Logan Paul and KSI billionaires in the process.
In this valuation deep dive, we'll explore the factors contributing to Prime's success and the potential impact on Logan Paul's and KSI's net worth. We'll also delve into the competitive landscape, the secretive CPG incubator behind Prime, and the strategies employed by beverage giants Coca-Cola and PepsiCo to protect their market share.
The Prime Comparables
To determine Prime's valuation, we'll examine a range of comparable companies in the athletic drinks industry. These competitors include established brands such as Gatorade, BodyArmor, Powerade, Celsius, Monster Energy, and Rockstar Energy, among others.
Image Source: CB Insights
By analyzing the revenue, valuation, and multiples of these companies, we can gain valuable insights into Prime's potential worth. While some data may be limited due to the private nature of these businesses, we'll use the most comprehensive and reliable information available.
The Secretive Incubator Behind Prime: Congo Brands
While Logan Paul, KSI, and JiDion are the faces of Prime, the company's success is attributed to the work of the lesser-known Congo Brands. Congo Brands is a full-service product CPG incubation firm that specializes in launching influencer-led beverages. By partnering with influencers and leveraging their audience reach, Congo Brands creates and markets beverages in exchange for equity in the company.
Founded in 2014 and based in Louisville, Kentucky, Congo Brands offers a range of services, including talent management, logistics, branding, merchandising, and product development. Their white-label manufacturing approach has yielded successful brands such as Prime and Alani Nu, which specifically targets women. With its proven playbook for incubating and launching beverage brands, Congo Brands has established itself as a key player in the industry.
Coca-Cola & Pepsi: Protecting Their Market Share
When it comes to the athletic drinks market, Coca-Cola and PepsiCo are fierce competitors. While PepsiCo holds the dominant position through its ownership of Gatorade, Coca-Cola's Powerade follows closely behind. Both companies are known for their agility and aggressive strategies to safeguard their market share.
Interestingly, seven out of the sixteen companies analyzed in the comparable list have ties to Coca-Cola or PepsiCo. PepsiCo owns Gatorade and Rockstar Energy and has invested in Celsius, while Coca-Cola controls Powerade, BodyArmor, and Fuze and has invested in Monster Energy.
This strong presence of major beverage giants in the market highlights their awareness of emerging brands like Prime. It wouldn't be surprising if Coca-Cola, PepsiCo, or other players in the industry forge partnerships, invest in Prime, or even consider acquiring the company to maintain their dominance.
Prime Valuation Estimates
Determining the value of Prime requires careful consideration of its revenue and industry multiples. Reports suggest that Prime generated $250 million in revenue in 2022. Using trend data and run rate analysis from CB Insights, we estimate Prime's 2023 revenue to be around $606 million.
To determine the valuation, we'll consider two scenarios: one using the median industry multiple of 6.8x and another using the high multiple of 13.8x. Applying these multiples to Prime's revenue, we arrive at the following valuation range:
- Scenario 1: Median industry multiple + conservative revenue = $3.1 billion
- Scenario 2: Median industry multiple + aggressive revenue = $4.1 billion
- Scenario 3: Celsius multiple + conservative revenue = $6.3 billion
- Scenario 4: Celsius multiple + aggressive revenue = $8.4 billion
Taking the average of these scenarios, we can estimate Prime's valuation to be approximately $5.5 billion. However, given Prime's rapid growth and impressive sponsorship deals with renowned sports teams, this valuation may be conservative.
Potential Acquirers and the YouTube Billionaires
The energy and athletic drinks market presents numerous opportunities for potential acquirers. Alongside Coca-Cola and PepsiCo, companies like Keurig Dr Pepper, AB InBev, Unilever, and Beam Suntory are eager to make a splash in this lucrative market.
While Celsius and Monster Energy seem less likely to acquire Prime due to their existing partnerships with Coca-Cola and PepsiCo, the landscape remains open for others to explore. Prime's ability to secure major sponsorship deals with influential organizations like Arsenal, UFC, FC Barcelona, and BASE Sports Group further enhances its desirability.
As for Logan Paul and KSI, their stakes in Prime remain undisclosed. However, media reports suggest that Logan Paul owns 20% of Prime. With a valuation of $5.5 billion, Logan's stake could be worth an impressive $1.1 billion. KSI's potential billionaire status is also within reach, solidifying them as the first YouTube billionaires.
To conclude, the rise of YouTube billionaires is not limited to MrBeast alone. Logan Paul and KSI, with their involvement in Prime, pose a formidable challenge to traditional beverage giants. Coca-Cola, PepsiCo, and other industry players should closely monitor the developments in this dynamic market.
Note: All data and insights mentioned in this article are derived from CB Insights.
Further reading:
- Prime Energy CB Insights profile
- Congo Brands CB Insights profile
- Energy Drink Sales Surge as Innovation Continues
- The Red Bull Family's Net Worth
- Patrick Mahomes-Backed Sports Drink
- Unilever-Owned Liquid I.V. Focused on $1B Brand Status
- Pedialyte Sales Grow Into an Adult Market
- The Prime Hydration Story: How It Became a Big Name in the Beverage Business
