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This article was originally published by ION Analytics and was written by Deborah Balshem.
Private equity firms are racing to assemble youth-enrichment platforms faster than the market can supply them, and the shortage of businesses that have reached real scale is setting the price, industry participants said.
A corner of the consumer market that was niche before the pandemic has become an institutional category in roughly a decade. Sponsor-led deal volume has stepped up sharply across early childhood education, youth sports, and programming built around science, technology, engineering, arts, and math, said Austin Black, a director in the consumer investment banking group at financial services firm D.A. Davidson.
In June, Brand Velocity Group acquired RCX Sports, which operates officially licensed youth leagues for professional properties including NFL Flag, the NBA, WNBA, MLS, the NHL, and MLB. Genstar-backed PlayMetrics, which merged with Stack Sports in 2025, this year acquired SportsEngine from Versant Media Group, while BSN Sports, part of KKR-owned Varsity Brands, bought online retailer Lax.com, and TZP Group invested in travel-team operator True Lacrosse.
Durable spending base
Over the past decade, the acceptance rate at the top 100 US colleges fell from 27.1% to 20.3% while applications rose 62%, and families have poured money into after-school programming to give their children an edge, said Alex Chefetz, managing director for consumer at investment bank and private capital firm CriticalPoint.
Those programs have widened from supplemental tutoring into a multi-category industry, Chefetz said, carried by dual-income households, a consumer shift toward experiences over physical goods, heightened attention to children’s physical and mental health, and app-based scheduling that lowers the barrier for parents. Institutional money has funded a wave of professionalization across formerly mom-and-pop operators.
The category now surfaces routinely as a core focus across adjacent franchise and services sectors, Black added, with many investors having built youth-enrichment theses only recently.
The businesses also give sponsors an attractive underwriting profile. Both after-school academics, a USD 14bn market, and youth sports, at USD 57bn, carry little exposure to AI, technology substitution, foreign competition, or recession, Chefetz said, and the leading operators tend to be asset-light and tech-enabled, converting cash well on recurring, high-retention revenue.
Spending has proved relatively resilient. Parents treat youth enrichment less as discretionary entertainment than as an investment in their children, and have kept paying where they see value, said Luke Scheibel, a director at global strategy consulting firm Grant Thornton Stax. He acknowledged that the market is not immune to affordability concerns.
Local roots, national reach
The most attractive assets carry strong local brands, high-quality programming and repeat participation that a new entrant would struggle to recreate, Scheibel said, in a market where relationships with club directors, coaches and recruiters often decide who takes part.
Once those relationships exist, Scheibel said, scale can layer on professional operations, technology and marketing, and stretch an athlete relationship across a child’s progression, from early instruction through travel competition and recruiting.
Fragmentation is itself part of the draw. A larger owner can push a level of differentiation that single-site operators cannot, which is why platforms are chasing add-ons in a market still dominated by founder-led shops, Black said.
Scaled platforms can expand beyond their original offering into adjacent sports, geographies and services, according to Scheibel. Buyers can play the theme through four distinct models, according to Chefetz: programming providers that run on recurring subscription revenue; facility operators that monetize physical real estate and draw property-focused sponsors; supporting software platforms that capture embedded payments and subscription fees; and equipment and uniform suppliers that live off seasonal demand.
The platforms that work, in Scheibel’s view, are the ones where buying adds up to something families notice. The strongest thesis is where consolidation creates “a better product for families rather than simply a larger collection of businesses,” he said.
Rarity sets the price
Valuations turn on how few scaled assets exist. The market is fragmented and it is “often difficult to uncover scaled assets,” Black said, which lifts the price of the ones that can actually be bought, particularly larger franchise systems and concepts that justify a premium with differentiated services.
Available public and private benchmarks sit far apart on paper, though Scheibel cautioned that valuations vary considerably among business models with different economics and capital needs.
A basket of 20 listed sports and education companies trades at about 1.9x trailing revenue and 9.6x trailing EBITDA, near its five-year average of 1.7x and 9.2x, Chefetz said. The private deals CriticalPoint could confirm changed hands closer to 5.2x revenue and 12x EBITDA, though Chefetz noted that private multiples in the sector are thin and unreliable.
Premium multiples go to businesses above roughly USD 100m in revenue and USD 10m in EBITDA, growing revenue at about 10% with EBITDA margins above 10%, run by management with M&A and operating experience, and without concentration among customers, vendors, licenses, or key salespeople, Chefetz said.
Scheibel drew a line between “sustainable pricing power” and “simply raising fees,” saying that durable growth comes from showing families more value, through better coaching, facilities or recruiting outcomes, rather than from charging more. He sees a shift toward a more balanced model, with some scaled platforms lowering per-player pricing as they add teams and using the volume to create efficiencies passed back to families. Affordability is becoming a more important underwriting consideration, Scheibel added, though it has not replaced premium pricing, which still holds where an offering delivers clear value, particularly for older, more competitive athletes.
Chefetz has seen little evidence that PE-backed platforms have raised prices faster than independent operators, tracing higher costs to supply and demand rather than ownership. Politicians have seized on the opposite perception, he said, to try to curb private equity’s entry into youth enrichment, so far with little legislative success.
A proposed federal bill, the Let Kids Play Act, would bar most private equity ownership of youth sports businesses unless investors meet certification requirements. It has not become law, and dealmaking has continued through 2026.
Eye to first exits
Private equity dominates the buyer universe, and the sponsors have grown larger as the category matured, Chefetz said. The first movers were lower-middle-market shops such as Brand Velocity Group. Mid-market firms like TZP, Alpine Investors, and Levine Leichtman followed, and large-cap names including Roark, KKR, EQT, and Genstar have now moved in.
Where strategics do appear, the line between them and financial buyers blurs, because many of the most active platforms are themselves PE-backed, Scheibel said. Juggernaut Capital-backed 3STEP Sports, the largest US youth sports club operator, and its rivals such as Perfect Game have kept expanding through acquisition. 3STEP most recently bought Premier 1 Events, pushing its basketball platform into the Mid-Atlantic.
The buy-and-build race looks set to run another 12–24 months, Scheibel said. 3STEP itself has reportedly hired Goldman Sachs to explore a sale.
As 3STEP and the first generation of scaled platforms approach the exit window, scarcity may shift from the assets themselves to the pool of buyers capable of acquiring them.
“Very few large strategics actually exist — yet,” Chefetz said.
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