This immigrant quietly made $550m. He has tips for making $1b
Gabriel Jakob is one of the most successful Australian entrepreneurs you’ve never heard of, but now he’s ready to tell his story.
Yolanda RedrupRich List co-editor
Gabriel Jakob has founded and sold three businesses for hundreds of millions of dollars, making him one of the most active Australian entrepreneurs in the past five years, but chances are you’ve never heard of him.
The 42-year-old Swede was first mentioned in the media in 2020, when he emerged as the buyer of a Point Piper mansion for $40 million. In the following years he garnered a handful of further mentions, tied to the purchase of another two waterfront properties in the exclusive locale totalling $99.5 million.
This is his first wide-ranging interview, but Jakob is so media-shy that he would consent to only photos that did not show his face due to privacy concerns.
Gabriel Jakob at his office in Sydney. Louie Douvis
Jakob moved to Australia from Sweden 20 years ago with only a few thousand dollars to his name. He founded two childcare centre chains, Little Learning School and Bliss Early Learning, and haircare brand BondiBoost, and in the next three years, aims to double the assets in his family office, Hyper Capital, to more than $1 billion. As of 2020, Hyper Capital had $550 million under management – a figure that was disclosed when he purchased the Point Piper property.
The reason he’s doing this interview now, Jakob says, is because he didn’t have anyone he could look to for advice on scaling and exiting companies when he moved here. He hopes to be that person for someone else.
“I will share my knowledge because I wasn’t able to acquire that from anyone … I want to give back to people who are in my position now.”
Jakob grew up in Linkoping in southern Sweden, where his father worked in textiles, while his mother was a politician in his older years. Jakob dreamed of being a successful businessman. He registered his first business at only 14 (Gabriel Jakob’s Investment Enterprise), buying excess stock from companies at cheap prices (borrowing money from family members) and selling it for a profit. By 17, he had a taste for cars. He caught a train to Germany without his parents knowing, bought a cheap car using the money he’d made from his first business, paid a driver to take it back to Sweden and sold it for a higher price, doubling his money and repeating the process.
“I started really young with little things like that. I knew I had that itch in me,” he says. “I had a goal that once I finished studying marketing and commerce, I wanted to go offshore and start something for myself with no backing from anyone other than myself … and I ended up settling for the land of crocodiles and kangaroos.
“I decided it was the perfect place to have a mix of a commercial hub, nice weather and good people.”
In Australia, he got sales jobs in telecommunications companies and automotive businesses before moving into consulting to small businesses. He had “no time to waste”, he tells The Australian Financial Review, having come to Australia to make his mark.
“I refused to go down the cafe path,” he says. “I thought if I did, it would be the wrong track. I landed and had a very specific target and goal in mind from day one. I wasn’t holding a full-time job for a while, I was trying different things and brokering deals.
“A key moment was getting into consulting, especially in the franchise sector. Once I got into that, I really knew I could add value … I started travelling a lot back to Europe, to the US and South America, to help Australian brands grow into those markets and find master franchisors who would acquire their licences.”
After nine years in Australia, Jakob acquired a childcare centre in Sydney’s Wahroonga for about $3 million in 2011, growing the chain to 54 centres by 2018.
Expansion plans were determined by the demographics of an area (if people could afford to pay slightly above competitors’ rates for a better service) and the ability to hire enough staff in the suburb.
“I was seeking to really provide the most premium model to parents possible in the industry,” he says.
“I did research and found that the colour red promotes appetite, so all of the lunchrooms had a feature wall that was painted red … I engaged the best nutritionists in the country, and overseas, to focus on children. I was the first to have an in-house chef in every single location.”
Parents paid for these perks, up to $145 per day in some locations. Prices varied depending on suburbs, mainly due to rent costs. Childcare is heavily subsidised by the government. For families earning less than $83,280 per year, 90 per cent of the cost is covered by the government, while for families earning between this amount and $533,280, the percentage decreases by 1 per cent for every $5000 of income.
“I decided to cut big holes between two rooms and make it into glass, so that kids can see for the year leading up [the children and educators in the room they will be moving into] so it’s never a shock.”
Jakob also rented a warehouse and filled it with toys and then studied which appealed most to boys or girls, so that he could equip his centres accordingly.
He was approached by private equity funds several times in his seven years expanding Little Learning School and turned them down. But when Bain Capital came knocking in 2018, he saw an opportunity to sell half his portfolio, but retain the newer centres and his pipeline of acquisition targets. The deal at the time was reported by Street Talk to be worth about $150 million.
“I would have [divested them] regardless. It allowed me to focus more on upping the model to the next stage,” Jakob says. “It made a lot of commercial and strategic sense to do it.”
The expansion to that date had been funded purely by Little Learning Centres’ earnings, with Jakob hesitant to bring in any external investors who would then have a say and influence over the direction. The remaining centres in Jakob’s possession were rebranded as Bliss Early Learning.
Less than two years later, he exited the industry entirely, selling Bliss to one of the world’s largest early learning operators, Busy Bees, for an undisclosed price.
While still passionate about childcare, Jakob says he was increasingly running into an issue that still plagues the sector today – a shortage of quality staff.
“I wasn’t keen on the idea of having something that’s so superior in quality, but it lacks in services because of external staffing,” he says. “It needs to go hand in hand.”
With the sector still suffering from staff shortages, Jakob says that won’t be fixed until the legislative changes are made to ensure childcare workers are paid more.
“Until those employees earn what they deserve… it will stay the way it is with the lack of quality,” he says.
While still running Bliss, Jakob started his next venture, haircare brand BondiBoost. He had been doing research to find a new business and noticed the launch of several premium haircare brands. He also noted there were plenty of low-cost brands, but a gap in the market for a quality mid-priced label.
BondiBoost’s black-and white branding was soon ubiquitous on social media and developed a cult following among Millennial women.
Jakob’s goal from the outset was to create a brand that could compete globally and within only a few years the brand was generating more than $US80 million in revenue.
While haircare was worlds apart from early learning centres, Jakob says he followed the same principles in creating the company.
“I still had to create a team, I had to create a brand and everything from scratch … it was born after careful research and strategic decision-making into the sector,” he says.
“Every single factor was carefully thought through – the look and feel of the products when you hold them, the labelling, the efficacy, the unboxing experience, the price point, the customer service, the delivery times, the website experience. It was carefully curated to ensure that the customer had a world-class experience.”
A big part of the brand’s success was its offshore distribution centres, which let Jakob carefully manage its freight costs and delivery times during a period when costs soared during the COVD-19 pandemic.
He also limited the product range he would let retailers buy, instead driving people towards the BondiBoost website, which had higher profit margins on sales.
He was approached by a global giant wanting to acquire the company only two months after launching BondiBoost.
He turned down the first offer, but in April 2022, he sold the business to US private equity fund Gauge Capital. While the price was not disclosed, sources close to the deal suggest it was Jakob’s largest exit.
“It became the third-fastest-growing beauty brand in the world. What really got me over the line was I’d taken the brand global, I could see the late nights the team were doing to manage the different regions, and I realised the business really needed a global management team,” Jakob says.
“It was a decision of building a global team and opening multiple offices in the US and expanding it ... and basing my time overseas predominantly, or run it the way I was, which I didn’t think was the best thing for the brand. So with all these PEs knocking on the door, I thought it was the right time [to sell].”
Trouble with the regulator
But it hasn’t all been plain sailing. In December 2022, Jakob was banned by the Australian Securities and Investments Commission from providing financial services for five years.
Jakob (then using the Swedish spelling of his surname Yakob), was the director of AlphaThorn, now known as Trading Life Services, which sold investments to wholesale investors, and which the regulator found produced misleading promotional materials.
Jakob’s conduct, ASIC said, was “careless as opposed to deliberate or dishonest”. In a statement, Jakob says no external investor lost money and he was not involved, and had no knowledge, of the conduct of the externally-appointed investment manager, Brett Trevillian, who pleaded guilty to forging portfolio performance verification reports. Trevillian was due to be sentenced on September 23.
Having been through three exits now, Jakob says the biggest mistake founders make is not bringing enough staff into the process.
“You need to be able to run your business exactly the way it is… whilst most of your attention is going to be focused on negotiating. The PE fund will have a set of eyes pulling apart your business, only commenting on things that will drive the price down.
“So you need to have a plan in place before you start [the sale process]. Often they’ll knock on the door, and you’re not prepared, so I suggest hitting the pause button. If they’re interested, they’re interested.
“Develop a strategy – who’s going to run the business, who can you rely on … are you going to hand over the negotiations to your CFO? Have a plan in place for how you will do both things at the same time.”
Start-ups, property and space
With three exits under his belt, Jakob’s focus is now on expanding his pool of investments via his family office, Hyper Capital.
He started Hyper after selling Bliss in 2018 and employed Karth Sree, the former chief financial officer of his childcare businesses, as his chief investment officer.
He invests across start-ups, managed funds including venture capital and equities-focused funds, residential and commercial real estate and commodities. He also has a commercial property lending arm, in which Hyper provides privately funded debt secured against registered first mortgages.
Jakob has a keen interest in space technologies and was one of the first investors in the world’s first commercial space station – Axiom Space. With Axiom having raised $US350 million at a valuation of more than $US1 billion last year, Jakob estimates his stake is worth eight times his initial investment already.
“I think it’s a game changer to Hyper Capital,” he says. “They still have a long way to go, and more people are pouring more money in. It has the second-biggest contracts after SpaceX, NASA is fully backing them and the government in the US. The returns will be astonishing when it’s finished.”
The entrepreneur is also an investor in Rhea Space, Expert360, Alex Bank, Lakeba and WarpForge.
In the next three years, Jakob has set himself the goal of doubling his asset base to over $1 billion.
Since selling BondiBoost, Jakob has been more involved in the day-to-day running of Hyper Capital. He has also been increasing his time dedicated to philanthropy and mentoring other founders.
He financially supports several animal rescue groups in Australia and abroad, such as Kitten Rescue Australia and Zambi Wildlife Retreat, and also volunteers his time, ranging from two days a week to once a fortnight, depending on what’s needed.
And his other great passion outside of business? Sprinting.
He trains six times a week under elite coach Roger Fabri and won four gold medals in the over-35 category of the NSW Sprinting Championships in 2022. He recently clocked a time of 6.70 seconds over 60 metres. The fastest 60m time in the world last year was only a touch faster at 6.42 seconds, although in sprinting hundredths of seconds mean a lot.
His favourite distance, however, is 200 metres because of the physical demands of sprinting at top speed over that length.
“I find commercial success wonderful if it’s coupled with personal fitness and health, otherwise it’s useless to me,” he says.
“I have a very strict regime and I absolutely love it.”
How I Made It is a regular article exploring the origin stories of Australian entrepreneurs. It’s also a regular podcast.