Black Circles

Blackcircles.com was the UK's first "click-to-fit" online tyre retailer, founded in Edinburgh in 2002 by Michael Welch. The business pioneered a model in which customers ordered tyres online for fitting at a network of independent local garages — the foundation of a category that did not previously exist in the UK.

In May 2015, Michelin acquired Blackcircles.com for £75 million.

The investment

Michael Welch was 22 years old when he wrote a handwritten letter to Sir Terry Leahy, then group CEO of Tesco plc, inviting him for a cup of tea. Terry accepted, and shortly afterwards became a non-executive director, investor and mentor to Michael — supporting the business from a start-up through to a strategic exit 12 years later.

Blackcircles.com remained capital-light throughout its life. The business was built on under $1m of total investor capital, growing from first-year sales of $5,000 to $80m of revenue by the year of exit.

How the Leahy family supported the business

• Long-tenured board seat. Terry sat on the Blackcircles board from the early years through to the sale to Michelin in 2015, a continuous involvement of more than a decade.

• Personal mentorship of the founder. Terry's role with Michael was explicitly framed by the founder as that of a mentor first — Michael has described him publicly as "most importantly my mentor" — with the investment relationship secondary.

• Retail and category expertise. Terry's three decades at Tesco, including his tenure as CEO from 1997 to 2011, gave the founder direct access to senior thinking on category management, supplier negotiation, customer proposition and the use of physical fulfilment networks — all of which were directly relevant to a marketplace operating across a fragmented base of independent fitting garages.

• Network access. Terry's contacts in UK retail and consumer business were used to open conversations at enterprise level – of material value to a founder.

Exit

In May 2015, Blackcircles.com was sold to Michelin for £75 million. Michael Welch remained with the business post-acquisition. Michelin already owned ATS Euromaster and saw Blackcircles as a digital channel that would complement its existing fast-fit network.

The Leahy family was a continuous shareholder from the early years through to exit — a relationship of approximately 12 years, against the typical 3- to 5-year hold of a UK PE buyer.