Blok has launched a fundraising campaign on Crowdcube. The company’s goal is to reach £500,000 – ahead of a possible funding round in 2023.
The investment is earmarked to accelerate the devleopment of Blok's hybrid digial platform and fund the construction of additional clubs in the UK.
The raise is currently only open by private invitation on the Crowdcube platform but will be open to the public in December.
Since launching in 2016, the company has opened three studios – two in London and one in Manchester – as well as launching digital platform, Blok TV.
Founder and CEO Ed Stanbury is now aiming to fast-track the company's physical and digital offering to capitalise on the changing market for high-end hybrid offerings, as the online fitness industry is expected to grow in value from US$16.15bn in 2022 to US$79.87bn in 2026.
Along with introducing a new digital product, Blok is also planning to double its physical footprint across London and the UK over the next two years.
“By leveraging the power of our tech, we can build a far superior and significantly more engaging customer experience than either physical gyms alone or digital platforms could ever offer,” said Stanbury.
In 2018 Blok raised over £891,000 from 571 investors on Crowdcube. It launched another campaign in 2020 raising £457,445 – 182 per cent of its £250,000 target.
In February and March 2022 Blok raised £2.75m of a £3.75m raise in pre-Series A bridge funding, led by ACF Investors, to drive business growth, which included hybrid studios and a digital fitness platform. This round was left open at the time to accommodate the current raise, which is being carried out on the same terms.
Blok’s financials show yearly increases in revenue, with £2.4m this year, £5.3m projected for 2023, £8.4m in 2024 and £23m estimated for 2026. EBITDA has not been disclosed at this time.
As well as VOD (video on demand), virtual studios and live streams – which are offered by competitors in the market – Blok intends to launch two-way live streams, which it claims few fitness brands are currently offering.
Stanbury told HCM the aim is to increase the lifetime value of each customer by driving memberships, with members yielding a lifetime value approaching £3k, versus sums in the £100s for pay-as-you-go, class-pack and Classpass customers.
However, Blok is among Classpass's top operators in Europe and Stanbury says this relationship will also continue.
The company expects to significantly reduce its central overheads and marketing costs as a percentage of revenue by 2026.
Recurring memberships are increasing at a rate of 4.6 per cent per month — with 50 per cent of new members joining as a result of word of mouth. It has a monthly reservation average of 9.6 visits and customer acquisition costs of £56.
Since launching in 2016, the company has recorded 1m in-person bookings, nearly 300,000 digital classes have been taken and over 400 in-person classes are registered each week.
Blok offers workouts and classes around ten disciplines: barre, boxing, yoga, strength, high intensity, dance, Pilates, mobility, restorative and calisthenics.
This story was updated to remove EBITDA, rollout specifics and overhead details at the request of Blok @2 December 2022
See Ed Stanbury's pitch for Blok below:
