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features

Ask an expert: Five industry investors give expert tips on how to get funded

From IPOs to seed-funding, private equity to crowdfunding, investor interest in the fitness sector is booming. Jak Phillips reports

Published in Health Club Management 2016 issue 3

Whisper it quietly, but fitness is fast becoming the hottest ticket in town for many investors.

From a glut of seed-funding for imaginative start-ups, to venture capital funding for mid-sized businesses breaking out, to high-profile IPOs for some of the sector’s biggest hitters, investors of all types are turning their attention to the health and fitness industry.

As noted by Deloitte’s Karsten Hollasch last year, one of the surest signs of an attractive investment climate is a surge in the level of merger and acquisition (M&A) activity. Presenting the European Health & Fitness Market Report 2015 at FIBO, he noted that there were 19 M&A transactions alone in 2014, compared to an overall total of 24 in the three years previously. This trend is continuing to gather pace, with the forthcoming report – set to be released next month – expected to identify 22 such deals in 2015.

What type of investment?
M&A aside, we’re seeing an explosion in investments of all types across the sector, and businesses must decide which investment strategy is right for them: seed funding, crowdfunding, venture capital, private equity, IPO? What sort of investor are they looking for? How much equity in their company are they actually willing to give up?

At the entry point to the market, innovative fitness tech start-ups such as dynamic pricing platform Dibs, social workout app Fitssi and management software provider Glofox have all attracted seed-funding in recent months to accelerate their growth into new markets. Meanwhile, new players such as 1Rebel have embraced the benefits of new investment avenues such as crowdfunding to raise eye-watering sums of money in double quick time.

From a private equity perspective, established chains such as Virgin Active and Barry’s Bootcamp have sold significant chunks of their businesses to high-powered investment firms (Brait and North Castle Partners respectively) to turbocharge their growth ambitions.

But perhaps the strongest example of the fitness sector’s growing appeal lies in the number of IPOs the industry has witnessed over recent months. Following US flotations for Fitbit and Planet Fitness, The Gym Group became the first UK operator in 15 years to go public in November (see HCM Feb 16, p28) and has since seen its shares climb 20 per cent as investors have scrambled for a slice of the fitness pie. Not to be outdone, budget rival Pure Gym is now limbering up for a listing of its own, with early indications suggesting the chain could be valued at more than £500m.

“The flotation of The Gym Group has shown the appetite for investment into the physical activity sector,” concluded Mazars’ head of leisure Gareth Jones in a recent market analysis. “How the IPO assists with the expansion of The Gym Group from its current 66 sites will be keenly watched by competitors, and welcomed by those who see the huge potential of the low-cost model in driving the growth of the sector.”

A growing appetite
Clearly there’s appetite for investment in the fitness sector, and the valuable contacts and expertise that these investors bring with them can be a huge asset in scaling a business: whether you’re a small start-up or a well-established firm looking to take operations to the next level, every company needs investment to make good on expansion plans.

We speak to some leading industry figures in fitness and investment to uncover their top tips for securing funding.

Sign up here to get Fit Tech's weekly ezine and every issue of Fit Tech magazine free on digital.
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features

Ask an expert: Five industry investors give expert tips on how to get funded

From IPOs to seed-funding, private equity to crowdfunding, investor interest in the fitness sector is booming. Jak Phillips reports

Published in Health Club Management 2016 issue 3

Whisper it quietly, but fitness is fast becoming the hottest ticket in town for many investors.

From a glut of seed-funding for imaginative start-ups, to venture capital funding for mid-sized businesses breaking out, to high-profile IPOs for some of the sector’s biggest hitters, investors of all types are turning their attention to the health and fitness industry.

As noted by Deloitte’s Karsten Hollasch last year, one of the surest signs of an attractive investment climate is a surge in the level of merger and acquisition (M&A) activity. Presenting the European Health & Fitness Market Report 2015 at FIBO, he noted that there were 19 M&A transactions alone in 2014, compared to an overall total of 24 in the three years previously. This trend is continuing to gather pace, with the forthcoming report – set to be released next month – expected to identify 22 such deals in 2015.

What type of investment?
M&A aside, we’re seeing an explosion in investments of all types across the sector, and businesses must decide which investment strategy is right for them: seed funding, crowdfunding, venture capital, private equity, IPO? What sort of investor are they looking for? How much equity in their company are they actually willing to give up?

At the entry point to the market, innovative fitness tech start-ups such as dynamic pricing platform Dibs, social workout app Fitssi and management software provider Glofox have all attracted seed-funding in recent months to accelerate their growth into new markets. Meanwhile, new players such as 1Rebel have embraced the benefits of new investment avenues such as crowdfunding to raise eye-watering sums of money in double quick time.

From a private equity perspective, established chains such as Virgin Active and Barry’s Bootcamp have sold significant chunks of their businesses to high-powered investment firms (Brait and North Castle Partners respectively) to turbocharge their growth ambitions.

But perhaps the strongest example of the fitness sector’s growing appeal lies in the number of IPOs the industry has witnessed over recent months. Following US flotations for Fitbit and Planet Fitness, The Gym Group became the first UK operator in 15 years to go public in November (see HCM Feb 16, p28) and has since seen its shares climb 20 per cent as investors have scrambled for a slice of the fitness pie. Not to be outdone, budget rival Pure Gym is now limbering up for a listing of its own, with early indications suggesting the chain could be valued at more than £500m.

“The flotation of The Gym Group has shown the appetite for investment into the physical activity sector,” concluded Mazars’ head of leisure Gareth Jones in a recent market analysis. “How the IPO assists with the expansion of The Gym Group from its current 66 sites will be keenly watched by competitors, and welcomed by those who see the huge potential of the low-cost model in driving the growth of the sector.”

A growing appetite
Clearly there’s appetite for investment in the fitness sector, and the valuable contacts and expertise that these investors bring with them can be a huge asset in scaling a business: whether you’re a small start-up or a well-established firm looking to take operations to the next level, every company needs investment to make good on expansion plans.

We speak to some leading industry figures in fitness and investment to uncover their top tips for securing funding.

Sign up here to get Fit Tech's weekly ezine and every issue of Fit Tech magazine free on digital.
More features
Editor's letter

Into the fitaverse

Fitness is already among the top three markets in the metaverse, with new technology and partnerships driving real growth and consumer engagement that looks likely to spill over into health clubs, gyms and studios
Fit Tech people

Ali Jawad

Paralympic powerlifter and founder, Accessercise
Users can easily identify which facilities in the UK are accessible to the disabled community
Fit Tech people

Hannes Sjöblad

MD, DSruptive
We want to give our users an implantable tool that allows them to collect their health data at any time and in any setting
Fit Tech people

Jamie Buck

Co-founder, Active in Time
We created a solution called AiT Voice, which turns digital data into a spoken audio timetable that connects to phone systems
Profile

Fahad Alhagbani: reinventing fitness

Let’s live in the future to improve today
Opinion

Building on the blockchain

For small sports teams looking to compete with giants, blockchain can be a secret weapon explains Lars Rensing, CEO of Protokol
Innovation

Bold move

We ended up raising US$7m in venture capital from incredible investors, including Andreessen Horowitz, Khosla Ventures, Primetime Partners, and GingerBread Capital
App analysis

Check your form

Sency’s motion analysis technology is allowing users to check their technique as they exercise. Co-founder and CEO Gal Rotman explains how
Profile

New reality

Sam Cole, CEO of FitXR, talks to Fit Tech about taking digital workouts to the next level, with an immersive, virtual reality fitness club
Profile

Sohail Rashid

My vision was to create a platform that could improve the sport for lifters at all levels and attract more people, similar to how Strava, Peloton and Zwift have in other sports
Ageing

Reverse Ageing

Many apps help people track their health, but Humanity founders Peter Ward and Michael Geer have put the focus on ageing, to help users to see the direct repercussions of their habits. They talk to Steph Eaves
App analysis

Going hybrid

Workout Anytime created its app in partnership with Virtuagym. Workout Anytime’s Greg Maurer and Virtuagym’s Hugo Braam explain the process behind its creation
Research

Physical activity monitors boost activity levels

Researchers at the University of Copenhagen have conducted a meta analysis of all relevant research and found that the body of evidence shows an impact
Editor's letter

Two-way coaching

Content providers have been hugely active in the fit tech market since the start of the pandemic. We expect the industry to move on from delivering these services on a ‘broadcast-only’ basis as two-way coaching becomes the new USP
Fit Tech People

Laurent Petit

Co-founder, Active Giving
The future of sports and fitness are dependent on the climate. Our goal is to positively influence the future of our planet by instilling a global vision of wellbeing and a sense of collective action
Fit Tech People

Adam Zeitsiff

CEO, Intelivideo
We don’t just create the technology and bail – we support our clients’ ongoing hybridisation efforts
Fit Tech People

Anantharaman Pattabiraman

CEO and co-founder, Auro
When you’re undertaking fitness activities, unless you’re on a stationary bike, in most cases it’s not safe or necessary to be tied to a screen, especially a small screen
Fit Tech People

Mike Hansen

Managing partner, Endorphinz
We noticed a big gap in the market – customers needed better insights but also recommendations on what to do, whether that be customer acquisition, content creation, marketing and more
More features