Revolutionising Beauty: How Aglow's Membership Model is Transforming Salons Across AU and NZ

Our first speaker is Carl Margrain, founder and CEO of Aglo, a company revolutionising beauty through their membership model.

Carl has vast experience in financial services and payments across a multitude of senior sales, strategic partnerships and product roles, including at debit success and Tyro payments.

Aglo was launched as the world's first dedicated salon, spa and clinic membership platform

in May, 2023.

Over to you, Carl.

Thank you, Damien.

It's a real pleasure to be here and very much appreciative of the opportunity.

So, at Eglove, we are leading the beauty membership movement, and that's a movement across Broadway salons, spas, and skin clinics.

Why are we so excited about the membership opportunity in this space?

The fact is that recurring revenue

totally transforms a business owner's business, their salon, and their life.

They're turning walk-in custom into locked-in revenue through memberships, allows them to achieve better valuations and better work-life balance.

On the consumer side, the access to treatments and services that consumers love through these businesses via subscription and membership options paid in line with their cash flow,

makes them vastly more affordable and convenient.

So who and what is Eglo?

We are genuinely the world's first and only dedicated membership platform for cell and spas and clinics.

Our platform's combining technology, payments and beauty industry experience.

We have proprietary tech

It's already managing tens of thousands of memberships on behalf of hundreds of businesses across Australia and New Zealand, and it's processing tens of millions of dollars per year committed ARR.

The membership opportunity in cell and sparsing clinics is massive, and today it's largely untapped.

This is a market with nearly 34,000 bricks and mortar providers in Australia alone,

with a significant global opportunity in terms of both the number of businesses and the total addressable spend that we're looking to access.

We are leading a total industry change here.

We believe that within five years, 50% of all consumer engagements with their salon, spa or clinic will be via membership or subscription.

Now, we come from this having been involved, myself and a number of the people involved in that globe, with transitioning the health and fitness industry to a membership model, first in Australia and New Zealand and then offshore.

30 years ago, when you went to a gym, it was largely pay-as-you-go.

There were concession passes, there were 10-visit passes where people were paying cash upfront for a membership.

Today,

The proliferation of membership and subscription commerce as we know it today by regular instalments is total.

The proliferation is literally almost 100%.

We believe that cell and spars and clinics represent the next major global opportunity for that transition.

So how do we work?

We are a payments platform with ancillary services encompassing

membership services around the design, the ideation and the management of membership programs for profit.

We provide marketing support and we manage all of the customer support and the failed payment follow-up that's inherent with an ongoing member payment relationship.

So broadly we describe ourselves as a payments orchestration and SaaS platform.

We have a number of revenue levers including a transaction fee,

Inclusive of all merchant service fees, our clients do not require any specialist merchant service relationships.

We have an establishment fee for the member charged with their first failed payment.

We have a small failed payment fee in the case of any insufficient funds declines on membership payments.

And we have a genuine perpetual SaaS fee for the seller and all the clinic.

When you wrap those fees up, we are today generating

around 400 basis points on the total platform volume processed through a blow.

We are already seeing industry leading unit economics.

We have gross margins exceeding 80%.

We are generating today in excess of $100 MRR per salon.

And this is growing significantly and rapidly as we see greater adoption of the membership model amongst the salon's existing client base.

And if you break it down to a consumer level, as a business today, we're generating nearly $8 per month per consumer paying their salon buyer and a buyer membership.

We have powerful traction already.

We're less than 12 months in, we're already dealing with over 350 active aglowe salons across Australia and New Zealand.

We have nearly 4,500 active aglowe members and the membership volume from salons, spas and clinics on an annualised basis is over $10 million.

Sorry, I'm just skipping through there.

There's some video content speaking to the unsolicited testimonials that we're receiving from the industry.

I'm not sure how that translates over Zoom, hence I'll skip through it.

We work with the Australian Hairdressing Council as their partner on membership billing.

with the equivalent Aesthetic and Beauty Industry Council in Australia, ABIC.

And we're receiving significant unsolicited testimonials on Instagram and Facebook from industry leaders raving about the platform.

My experience in payments tells me that is fairly unique.

And we also have a large and growing community of industry professionals, over 1300 now, in our dedicated Facebook community.

devoted to the membership model.

It's an organic space where they are sharing what's working in terms of memberships for their business.

We have an incredible team and a small team, but we're combining deep payments, SaaS, and industry expertise.

Our board is both experienced from a governance perspective and also an industry perspective.

We are chaired by Stephen Holmes, who was the global CEO of Transaction Services Group, who dominated subscription and membership commerce within the fitness industry.

We have Michaela Hopkins, who's head of marketing at Tracksuit, on the board who brings deep brand and marketing expertise.

Sean Quincy, who was the CEO and founder of

Chinoa Pay, Exited to Latitude Financial Services, and Justin Mitchell on the board, who was the Chief Risk Officer at Tyro Payments, who many in the primary markets community will know well.

We are currently operating in Australia and New Zealand.

However, this proprietary technology and the proprietary platform is globally capable and globally scalable today.

So AU and NZ right now.

In the future, we very much have aspirations and designs on global expansion.

We are currently raising $1.2 million.

We're doing that at a pre-money valuation of $5 million.

We have $600,000 committed, $600,000 to fill.

This raise takes us

well through a million dollars ARR and in fact we are passing that right now.

It prepares the business for a series A in circa 12 months time to establish a US beachhead.

The use of funds is largely around ramping adoption initiatives in Australia and New Zealand.

and to bring in additional senior executive talent to ready the business for that Series A and that global expansion.

We have a very clear path here.

So proving new economics, we have a very established acquisition and activation model.

We believe we have the ingredients to scale in Australia and New Zealand.

We are acquiring leads at circa $55 per lead.

with an annual recurring revenue of over $1200 per client in the Australian and New Zealand market.

We have profitability on the horizon in the very short term, but we do wish to pursue an aggressive growth strategy to accelerate in Australia and New Zealand ahead of US expansion.

And that is a snapshot of where we're at today, what we're seeking and what we're looking to do with this current ground.

Really appreciate the opportunity to speak with you, Jamie, and to the community.

Thanks for your presentation, Karl.

Do you have time for a few questions?

Absolutely.

What does the typical consumer look like and what does their membership include?

So today we talk about a glow as being the dedicated membership platform for salons, spas and clinics.

Right now, primarily we are working with results driven skin clinics and an increasing number of hair salons.

But if we think about the skin clinics as an example,

We are dealing with a predominantly female client base, 20 to anywhere, very high discretionary spend, and we're seeing a growing trend of male consumers.

So this is a very large client base.

This is a client base with high discretionary spend,

and we're seeing half the population start to access these services as an illustration for the growth potential.

We really like the space because we don't see the same levels of payment delinquency that we see in other sectors because of who the consumers are and the nature of the services.

So the fault rates are very, very low.

At any point in time,

97% of Oblo members are up to date.

In terms of what they're including in those memberships, LED masks, micro-needling, things like high-end facial services, hydro-facial, and within the hair, as an example, pattern colour.

The beauty of it is people are attending their appointment, knowing that when they sit down in that chair, they've already paid for the call service.

So the benefit

for the business beyond the recurring revenue is that those consumers on a membership are far, far more likely to avail themselves of the high-margin take-home retail at the conclusion of their appointment because there's no friction around the point of sale.

Can you share any case studies in terms of how Aglo has changed a salon's business for the better?

Yeah, absolutely.

So we have a number of examples already

where we have clients generating in excess of $1 million in true ARR, annual recurring revenue, in a bricks and mortar single site skin clinic.

And what that has meant for those businesses is one, you increase the business valuation significantly because you've taken out those peaks and troughs and the uncertainty around no-shows and cancellations.

More broadly, we're seeing the life and lifestyle impact of this model because these are business owners because of the appointment-based nature of the industry, that previously had difficulty accessing mortgages and lending.

We're seeing clients buying investment properties, they're building first homes because the bank will, for the first time, lend, provide mortgages because of their glow reporting showing that committed future recurring revenue coming into the business.

Thanks, Carl.

That's been very informative.

Great to see you.

Thank you.