How Topgolf went from a $4 billion IPO to a private equity fire sale

At one point, Topgolf was called the best thing to happen to golf since Tiger Woods.

But in January 2026, the entire business sold to a private equity firm, basically in a fire sale.

The price was $1.1 billion, which is less than half what it was worth just 5 years before.

Here's the crazy part. During those 5 years, the business never stopped growing.

They kept opening new venues and well, they kept making more money. How did the hell did something with so much promise around golf go so wrong and end up, well, being a disappointment?

This video is the rise and fall of Topgolf, version 2, 'cause I actually did this video over a year ago, and I'm doing it again with new information.

Oh, and by the way, thanks to Emergent for sponsoring this video. More on them later.

If you're interested, I turn each and every one of these videos into a one-page cheat sheet you can download off my website to tell you more about the story of the company, girdley.com/youtube.

The story of Topgolf actually starts back in 1997, not in the United States, but in the UK by two twin brothers. Their job was to be mystery shoppers. They'd go into stores and then report back to their employers what they saw. One day they were instructed to go look at a driving range, the type of place where people go out and hit golf balls into a field.

What they saw really bored them. There was no game and no entertainment. Their idea was to turn that driving range into a good time, and they were gonna turn it into a video game by buying $2 RFID golf balls, which basically cost 10 times what a normal practice range ball costs, and use electronics to keep score. Target Oriented Practice Golf, or Topgolf, and the first one opened in the UK back in 2000. The United States is 25% of the global economy, so the brothers weren't stupid. They brought the concept to the United States, and the very first one opened in Alexandria, Virginia back in 2005.

Pricing model sucked, the venue was the wrong size, and nobody came, so they closed it up.

But in February 2007, a new US investment group bought into the concept They opened a new venue, a Topgolf in Dallas, Texas. 3 levels, dancing lights, video games. It was a party in a, well, party with golf clubs. It was so popular that the first one had a wait time of 6 hours for people trying to get in. And Dallas, it turned out, was the perfect place to open this up. Warm weather year-round, high disposable income, and, well, depending upon the time of year, not a lot to do if you're a family. Based on that winning formula, the Topgolf team headquartered in Dallas stamped out basically the thing, same thing across 100 new venues over the coming years. But here, remember, Dallas is a special place. It's one of the wealthier big cities in the United States, and, uh, this idea of copying what worked there and putting it everywhere else, well, that would come back to bite the chain later on. But for now, well, they started to roll it out. But here's the thing about Topgolf, and it showed up when I did this video before, a lot of people would equate Topgolf to playing golf. It's not. It's a night out. It's like an arcade with golf clubs.

Showed in the numbers, 60% of the people that would go to Topgolf had never played golf before, and revenue was almost 40% food and beverage. It was a restaurant and nightclub with golf clubs involved. Typical driving range might earn $20,000 to $40,000 per year per bay in a big city.

A typical Topgolf would earn $150,000 to $200,000 per bay.

Ironic because the two brothers back in the UK thought they were building a golf improvement tool to gamify getting better at golf. In reality, they just built a golf club Well, like a nightclub that families would come to and hit golf balls.

2014, the chain would hit the Inc. 500 and do $164 million in revenue. 2016, they invested in a company called Toptracer. This was pretty cool. It would watch your golf shot and like show you where it went out into the field.

Pretty fun stuff. Bought a mobile game called the World Golf Tour that had 14 million players designed to bring the Topgolf experience to your mobile phone, I guess.

Whatever. By 2019, it seemed like they were on top of the world. They'd opened up here in my town, San Antonio, Texas, and I remember at first it was almost impossible to get in. People were dying to go to Topgolf. At 63 venues and they were doing $1.2 billion in revenue. There was talk that they should go public, but then as that talk reached a fever pitch came 2020. And if you remember 2020, March of that year was when everything shut down for COVID, and one of those things was all the Topgolfs. COVID would actually prove to be a big help to the brand, but in a way that you won't expect.

We'll come back to that in a couple minutes.

The thing that Topgolf had going for it was you could go outside basically, at least here in San Antonio. Like, you were outdoors when you were hitting the balls. And many of them started to open up in May 2020, right around the time people were really sick of being trapped in their houses and desperate to go outside. Participation in things like Topgolf grew 41% from 2019 to 2025. And believe it or not, in 2022, the number of virtual golf rounds people were playing overtook the number of real rounds people were playing, uh, in the United States that year. Crazy. And something I haven't mentioned already was that By the time COVID came around, Topgolf had been preparing a $4 billion IPO and they were getting ready to go out with it right around the time everything shut down for COVID. And COVID, as May and that first summer came around where people were desperate for things to do, including Topgolf, well, it made the whole chain look extraordinary.

If COVID hadn't have happened, Topgolf would've gone public and been an independent company. But when they didn't, well, it created an opening for another company. Callaway.

But before we get into that, I want to talk about today's video sponsor, Emergent. I have operated and invested in a ton of businesses, and one of the biggest operational problems is always the same. Half the company lives in spreadsheets. Revenue is in one sheet, cash is in another, pipeline is in a CRM, unit economics are in a Google Doc, and nobody has a single screen that tells you if the business is actually okay. The traditional fix is ugly. You either stitch together 5 SaaS tools that live in Zapier, or you pay someone $15,000 or $20,000 to build an internal system and hope it stays up to date. Emergent is built exactly for that problem. You describe what you want in plain English and it builds the entire app for you. Front end, back end, database, authentication, all live and deployed. So instead of saying build me a dashboard, you can say I want one screen that shows cash in the bank, weekly revenue by business, AR aging, and a red flag if any unit drops below a certain threshold. And Emergent builds it. Under the hood, you can literally see multiple AI agents working at the same time. One handles the interface, one writes the backend logic, one sets up sets up the database, and another runs tests and fixes issues as they come up. It's like a tiny product team running in parallel. The key difference from typical no-code tools is that you are not dragging boxes around and gluing Airtable or Supabase together. Emergent generates the backend, auth, and database from that one prompt, so you end up with something functional, not just a pretty mockup. If you don't know where to start, rebuild your weekly CEO dashboard in Emergent—revenue, cash, pipeline, and one or two leading indicators on a single screen. That one dashboard alone will make you a operator. Check out the link in the description if you want to try it.

Chip Brewer was the CEO of Callaway Golf, the types of people that made $700 drivers, sponsored people at the Masters, all that kind of stuff. They were a golf equipment maker. Believe it or not, Callaway had invested in Topgolf back in 2006, and their CEO had been on the board since 2012. He had a front-row seat of what's been been going on. Chip Brewer, the guy would spend 12 years in the boardroom of Topgolf while he was running Callaway. He developed an emotional attachment to the entire business. Better way to have a win both at Callaway and at Topgolf than to merge the two together by acquiring Topgolf for Callaway. Callaway has just acquired the popular Topgolf. In October 2020, in the middle of the pandemic, Brewer announced that they were going to be acquiring Topgolf. Callaway would, in an all-stock deal, buying the two companies at about $2.6 billion. The deal consummated in March 2021, and Callaway assumed over a half billion dollars of the debt that was sitting on the balance sheet of Topgolf.

And remember, you're building these big expensive driving ranges with kitchens and video games and arcade stuff.

Like, that money had to come from somewhere to build those things up, and they had borrowed a lot to do it. Brewer's thesis was the classic flywheel we talk about on this channel, which is you do one thing, it helps another thing, and so on, right?

Disney has a flywheel.

You go to the park, you learn to love Mickey Mouse, you like cartoons more, you buy his albums, you watch the TV shows, which makes you go to the park and spend more money.

Well, the same idea would potentially hold true for the combined Callaway and Topgolf. You'd go into a Topgolf, you get exposed to golf, you see they have a Callaway store inside of it, you think those are the clubs you should buy because you're about to try them when you play the little game, and suddenly buying more Callaway clubs brings people in Topgolf.

Well, you get the idea. When Brewer, going back to that moment that started this video, called Topgolf the best thing to happen to golf since Tiger Woods, There's a problem with that idea. Real golfers didn't want to go to Topgolf.

He would go on to call Topgolf the Peloton of golf, and we all know if you watch the video on this channel what happened to Peloton. But it was the idea of integrated software, hardware, experience, and community. You know, sounded good on a PowerPoint in a boardroom, I guess.

And if you remember the takeaway from the Peloton video on this channel, it was that people confused the COVID bump that they saw from the things going on temporarily during the pandemic from from generational change that was permanent. And when things receded and went back to normal after the pandemic, well, Peloton was left in a big mess. But the stock market loved it. Heck, the stock market liked everything in 2020 and 2021. The reason was the government was spewing a ton of money into the economy, and a lot of that money was going straight in the stock market, buying stocks. Peloton stock would go up nearly 500% that year from about $5 to nearly $37. 2022, based on this growth. They rebranded the whole company to Callaway Topgolf, and suddenly it appeared like the flywheel was working for Callaway. But there was a problem. The problem was what looked good in the boardroom didn't actually translate in reality. The people that were coming in and trying Topgolf very rarely became golfers, and even rarer still bought Callaway products. Callaway's growth was like most of the golf industry during 2021 to 2023. People were desperate to get outside. They were buying bicycles, volleyballs, and golf clubs. So they went up just like the rest of the market did COVID. Topgolf got people to think about golf, but it didn't get them to think about Callaway. That's the reality of business. You can mistake tailwinds that are temporary for a flywheel that's permanent. There's a big difference between Disney's tailwinds and flywheel and the temporary COVID bump that Callaway Topgolf was seeing. What happened next is a lot of fundamentals of Topgolf would go against the brand. A typical one was 65,000 square feet. If you're going to open 10 or 12 of those a year, well, they cost $20 to $40 million each, even after you factor in land costs. That's a lot of capital. Topgolf's solution had been to take on a lot of debt, and there's two 2 ways you could take on debt. You can borrow the money against the land and the improvements that you do. And another way you can do it is promise to pay somebody else a fixed amount over time for the coming years. And that was, well, basically building these locations and then leasing them back from a REIT, or a real estate investment trust, that would become the owner of the building.

Sale-leasebacks or borrowing, they are not inherently wrong.

They are tools that can be used to run a business really well. The problem is they don't always stay at the same price. And that price is interest rates. And at the time, Topgolf had a huge benefit, which was zero interest rates back then, were the norm. People were basically— the government had money and they wanted people to deploy it to keep the economy going. So that meant at that kind of interest rate, a typical Topgolf facility might return its all of its capital in less than 5 years. Whereas a McDonald's, for example, is fundamentally a real estate business that just happens to sell hamburgers where they own all the land, Topgolf was doing exactly the opposite. They're often building these locations, selling them to somebody else, and then basically turning around and becoming a tenant. Topgolf built the empire. These other REITs who theoretically had cheaper cost of capital, they actually owned it. And as we started in 2022, something happened, which was the government stopped putting so much money into the economy and wanted to slow down because inflation was coming. So that meant interest rates went from basically nothing to 3%, and the Fed kept raising them after that. And the discount rate, meaning what they would give out money to banks to lend, that base rate kept going up and up.. And that had a problem. It started to slow down the entire economy. And one of the first things to feel that was Topgolf. For the first time in history, their same-store sales actually went down by 3%. If you look at, say, a chain like Starbucks, who might be opening 1,000 new stores a year, you can look at just the top line of total revenue and feel like the chain's growing. But what analysts really look at is what's happening with same-store sales. And if they start declining, you know, that's a problem. As the golf fad started to go down and the Topgolf fad started to go down in 2023, 2024, and 2025, they were losing 3%, 9%, 12% year over year in terms of sales. Revenue was decreasing. 2022 had seen a huge benefit from corporations wanting to get back together in person, so they booked places like Topgolf for corporate events. Those things, as the economy started to slow down and layoffs happened during 2023 to 2025, they dried up. Corporate events were down 13% in 2024, for example. Problem was with all of this, Callaway had just built their entire model and financing of the deal, assuming that the level of enthusiasm for Topgolf would just keep growing. And on the consumer side, Topgolf did something bad. In order to keep revenue going up, they kept raising prices, meaning middle-income families were getting squeezed out. If you go back and look at my original video on Topgolf, that was the number one complaint. People are like, I don't go there anymore. It's too expensive. Yeah, it's because it is. If you go look back then, I remember going back in 2023 and 2024, looking at the bill and being like, how the hell did we just spend $300 to hit golf balls and have a couple of Bud Lights? Well, the reason was Topgolf was desperate to grow their revenue and they were taking it out on you and me. If you've watched my video on this channel about CrossFit, by the way, super popular video, nearly a million views at this point, is awesome. The same thing that happened at CrossFit actually was starting to happen at Topgolf, which was Topgolf had created this kind of eatertainment idea where you go and have a good activity and you eat good food and buy some beers and do it all in one place. Well, suddenly people, just like it happened to CrossFit where F1 and Orangetheory and all these folks started to copy them and copy that idea, started to flood into the market. And suddenly there were a bunch of things, everything from Pop Stroke for, you know, for mini golf to Bolero for bowling, all going after the same idea of how do we bring in a middle-class family and get them to spend a couple hundred bucks here and have a good night out. It wasn't just ancillary concepts like bowling or, you know, F1 racing or go-karts or whatever, all these things copying entertainment. There are other golfing activities as well, including some people who cut out all the land purchase and did just indoor golfing simulators, and that was it. By 2025, here was Topgolf with all this money invested and over 100 venues and sales going down by double digits year over year. And so as the kind of shine and the fad of doing Topgolf wore off, People got to experience it and didn't come back, and the golf fad started to end after the COVID pandemic, and interest rates went up and competitors came in. Well, that's how we ended up where we are with Topgolf. And the stock market started to see the problem with the Callaway and Topgolf combination. It's called the conglomerate discount. If you have like one part of your business that's one kind of business and another one that's a great part of your business, well, the stock market punishes you for having that crappy part of your business. That's why you see them often like split up into good businesses and bad businesses because they want to get value for when they're a good business. And Callaway itself, making golf clubs that people will buy for $700,000, golf bags and all that kind of stuff, that's a great business to be in. Topgolf, man, required a lot of capital, shrinking with a ton of competition. Terrible business. Late 2024, Callaway Topgolf stock would be down 71% from its all-time high. In 2024, the combined company would take a $1.4 billion goodwill write-down against its valuation. And that would, well, be not good because it was a sign for the market that they had overpaid for a lot of assets. Total net loss would be nearly $1.5 billion for that year on revenue of just $4 billion. Whereas in 2020, Callaway had bought Topgolf for half a billion dollars and put a bunch of money into it. By 2025, they would sell it all at a pretty disappointing value. In 2025, that sale would go to Leonard Green and Partners, who by the way is a private equity firm that has showed up on this channel many times and many of you hate because they ruin your favorite companies. Anyway, so that sale to Leonard Green of Topgolf would happen at half the value of what Callaway had paid for it as an implied value. Not even talking about all the capital that shareholders had put into creating all these venues and upgrading them over time, when heck, that money would have been much better off just putting out new golf clubs. That's a great business to be in, right? Sometimes people in great businesses just get distracted and get themselves into bad businesses. I don't get it. That's why in January 2026, the deal closed with Leonard Green Callaway got $770 million, used that to pay down a bunch of debt, and took their medicine and the loss on the whole adventure of the flywheel that, well, never happened. Today, Topgolf is owned 60% by private equity and Callaway still owns about 40% of it. And they're kind of back where they started before the pandemic. But there's an interesting twist to the story. Remember how I told you about Toptracer, the device they bought that would track balls flying through the air at different venues and driving ranges? That thing today is used at over 10,000 different locations and driving ranges, and most of them aren't Topgolfs. It's probably the best part of the entire Topgolf business, a software business that operates at huge margins. They don't have to buy land or even any golf balls, just license software and collect all the profits. One crazy thing about business is the product of businesses that tend to exist are basically a function of the macro environment. In this case, Topgolf is perhaps the poster child. Of things that happen when capital is so cheap it's basically free because interest rates were at zero and the government wanted money to be funneled into the economy. But what happens to all of us, whether in a small business or a big business, is, uh, what happens when the world changes around us and, uh, that macro environment and the type of stuff going on isn't there anymore, and suddenly your business idea isn't as viable as it once was. In this case, that's exactly what happened to Topgolf.

All right, if you enjoyed this video, let me know in the comments below.

It'll encourage me to make more. Catch you next time.