Sometimes the best way to know that something works is to try it out for yourself.
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Health and fitness goals tend to be a New Years resolution for many consumers. So we decided to ask five venture capitalists investing in fitness apps and platforms how they rate potential investments. Some of them tried some apps or products while others tried as many as they could get their hands on when deciding what to invest in and what to give away.
When it comes to fitness apps and platforms, it is more certain that there is lots of money to be had in the industry, in part due to the global pandemic that is keeping everyone at home for much of 2020. Not only did home become a place of work, but a work place became a gym.
Investors have invested $ 7.3 billion in just over 730 U.S. fitness apps and platforms over the past five years. According to known funding rounds in the Crunchbase database, it wasn’t until 2020 that $ 2.4 billion came in.
Tim Chang, Mayfield Fund
Tim Chang, a partner at Mayfield Fund, 1 was a Seed investor in the Tonal, a smart home gym that used artificial intelligence and coaching for strength training in 2015. He has been involved in health tracking, exercise, and nutrition for 20 years. He was particularly interested in weight lifting.
“I’ve tried every piece of equipment – even a home gym,” Chang said in an interview. “Tonal was wonderful and became a big part of my identity. When Tonal came along, I got it because personal passion fits where you invest, but initially no VC wanted to touch it. Silicon Valley looks down on weight training. They think it’s for the ‘meat heads’ and just want to focus on distance sports with no sophisticated equipment. “
Tonal picked up again $ 200 million in known funding since its inception in 2015 according to Crunchbase data. It was something that Chang knew was going to happen at some point.
“It is gratifying to see the market achieve what I have always known,” he added.
Elizabeth Edwards, H Venture Partner
An early investor in Peloton, Elizabeth Edwards, Founder and general partner of H venture partnerwas able to see the production prototype for the stationary bike connected to the app. This was a pre-start and there weren’t any classes to sell, but Edwards saw the potential of the product.
“What sold us was the quality of the bike, the plans and the type of content they wanted to do,” she said in an interview. “It cost it SoulCycle experience and bring into your home. I was familiar with the nature of the content and have been doing yoga for the past 15 years. “
While she likes the bike part, Edwards leaves that to her husband and is much more interested in Peloton’s streaming yoga content, which she often trains with. She also hopes Peloton will bring out an elliptical product.
Peloton, now a public company, rallied altogether Known funds of $ 994.7 millionaccording to Crunchbase data.
Todd Dagres, Spark Capital
Spark Capital Founder and Partner Todd Dagres remembers trying out mirror, a connected fitness platform that broadcasts classes on a mirror-like screen after the company was founded in 2016. It was a unique experience, not only because he could touch it and try it, but also to feel the results.
“We got a prototype demonstration and that helped us a lot,” Dagres told Crunchbase News. “We were sold on Mirror when we saw how different and unique it was, and we also saw it as an opportunity to be a leader in emerging categories.”
Spark continued to guide both mirrors $ 13 million Series A. and $ 25 million Series B. in 2018. Spiegel was later acquired by Lululemon for $ 500 million in June 2020.
Dagres himself was a co-founder of a networked fitness platform, Liteboxerthat offers a boxing experience with music and training. The company raised $ 4 million in seeds Funding in 2020 led by Will ventures.
Kyle Lui, DCM Ventures
There are two things to know Kyle Lui: First, he’s a big type of product – you name the fitness app or platform, and he probably tried. Second, he thinks the home fitness setup question is a common question in 2020, but definitely not in 2019.
“I try them all” that DCM Ventures Partner said in an interview. “I’m excited about the room and am looking for the next convincing product.”
Lui said there is a lot of space in the fitness area, and while a product could talk to it, he knows it doesn’t necessarily talk to others. Some of the products and services he tried had good brands and marketing, but lacked true uniqueness. He also believes that some of the all-digital experiences – those with one-way interactions – may not attract consumer attention in the long term, he added.
Most recently he was involved in time‘s $ 60 million Series B.. Tempo is a home fitness platform that combines equipment, training guidance and social motivation with 3D sensors and artificial intelligence. DCM ran the company $ 17 million Series A. Round in 2019.
“We had a good sense of what we were looking for in Tempo and when we tried it for the first time we had a ‘wow’ experience,” said Lui.
Mark Wan, Causeway Media Partner
Mark Wan is another VC that has tried many fitness apps and platforms to invest in some of them. Causeway Media Partner, where Wan is a managing partner, focuses on later sports and fitness investments.
Two were Zwift, an online fitness platform for indoor cycling and Freeletics, a digital fitness company that provides tools to promote physical fitness and mental strength. Causeway invested in both companies last September: It led Freeletics’ $ 25 million Series B. and was involved in Zwifts $ 450 million Series C..
Wan sees two to five companies per month in this space, and while he doesn’t try all of them, he’s happy to test a few of them.
“I don’t want to use myself as a proxy for the market because I have a sample size of one, but I’m curious how the experience is: the training style, the intensity, the equipment, how easy it is to sign up and the customer service to test, ”said Wan. “With Zwift, we thought it was the best thing to ride a bike, were a real size and had a great management team. Freeletics is one of the best out there, an all-digital app with scalability and a great leadership team. “
The fitness category is particularly interesting just as that global health club market Edwards said it was worth nearly $ 100 billion. She cited research that found that while members of the health club have returned to these facilities, or will return once it is safe, younger Americans like to exercise at home and plan to keep going.
All of the VCs who spoke to Crunchbase News for this article said that the key to fitness apps and platforms being successful is keeping their promises and motivating customers to use them regularly.
Dagres said he had tested products that had outstanding full body benefits, but it either put long-term strain on his body or it was so boring that he didn’t see himself doing it every day.
“You have to have the effectiveness. If you say that 30 minutes of exercise will get you the calories burned, you have to do it,” he added. “The other part is just as important, if not more, it has to be something people will keep doing. If not, there is no use. “
Illustration: Dom Guzman
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