September 2019 Recap: What’s Trending in Fitness and Wellness
If you subscribe to our weekly newsletter, then you already know we’re constantly tracking the investment, acquisitions, and transactions impacting fitness and wellness.
Taking a step back from the week-by-week rundown, here’s a recap of the trends and developments we saw this month.
New This Month
Let’s just say the Fitt Insider team was busy this month. In addition to producing the weekly newsletter, we published the DTC Healthcare Report along with two new content formats.
- ICYMI, here’s the DTC Healthcare Report — a look at the new-age clinics, mobile apps, and at-home medical testing companies disrupting the trillion-dollar healthcare industry.
- In the first two editions of Behind the Brand, we took an in-depth look at what makes Ritual Vitamins and Daily Harvest unique.
- Finally, for the Startup Spotlights, we chatted with BallBox and Onyx.
Peloton went public last week. Although the connected fitness company raised more than $1B in their market debut, the stock tumbled — dropping 11% on the first day of trading. At the time of publication, the stock was trading at $22.51, well below the $27 opening price.
This stumble was precipitated by a number of factors:
- Public investors are skeptical that at-home fitness, in all its forms, is just a fad.
- Peloton has a music problem — a $300M lawsuit and $50M in licensing fees.
- Wall Street has soured on cash-burning startups — PTON had $245.7M of net losses in fiscal ‘19.
- Increasing competition and declining gross margin were also cited as concerns.
The hottest take of them all. That goes to NYU professor Scott Galloway who called Peloton out on their “yogababble”.
According to Galloway, yogababble is a company’s attempt to conceal its “numbers, business model, [or] EBITDA” with “charm, vision, bullsh*t, and fraud.” In Peloton’s case, the company’s mission statement—“On the most basic level, Peloton sells happiness.”—scored a 9/10 on Galloway’s yogababble index. Galloway’s conclusion?
“Nope, similar to Chuck Norris, Christie Brinkley, and Tony Little, you sell exercise equipment.”
Zooming out: For Peloton, it’s an uphill climb from here. But CEO John Foley is up for it. Stay tuned.
The Boutique Bust?
In recent years, boutique fitness has been booming. But now, there’s uncertainty in the system.
- A looming recession threatens to derail the explosive growth — If the markets sour, expect members to rethink spending $34/class.
- Boutique fitness is becoming increasingly saturated — as Bloomberg points out, concepts like cold-weather and prison-style workouts are becoming “comically niche.”
- Connected and on-demand fitness is capturing market share — let’s assume a few of Peloton’s 500K subscribers ditched a studio membership.
- Lastly, the wellness-ification of fitness is creating competition for studios — consumers are spending more on self-care at acupuncture, napping, stretching, and spa concepts.
Looking ahead: Surely, there’s a course-correction coming. Whether it will be a hard reset or a recalibration remains to be seen.
News & Notes
Tech-powered movement rehabilitation raised rounds:
- FeetMe, a leading tech-based gait assessment and rehabilitation company, closed €9.4M in Series A funding led by LBO France.
- Kaia Health, a digital therapeutics startup that uses AI-guided exercise to treat chronic pain, raised $8M from Optum Ventures.
- Figur8, a healthtech startup out of MIT’s Media Lab making movement sensing equipment for soft tissue-related symptoms, raised $7.5M in seed funding from P5 Health Ventures and MIT fund E14.
Plant-based foods brought home the bacon:
- PURIS, a Minneapolis, Minnesota-based pea protein producer and Beyond Meat supplier, raised a $75M investment from Cargill, one of North America’s largest beef processing companies.
- Denmark-based Simple Feast, an on-demand provider of plant-based meals, raised $33M in Series B funding.
- Israel-based Redefine Meat, makers of 3D printers for alternative meats, raised $6M in seed funding led by CPT Capital, with participation from Hanaco Ventures and PHW Group, a German poultry company.
- New Wave Foods, makers of a plant-based shrimp substitute, raised an undisclosed amount of funding from Tyson Ventures.
- Barcelona-based NOVAMEAT, developers of equipment that produces 3D printed meatless “steak”, raised seed funding from prominent plant-based investors New Crop Capital. Terms were not disclosed.
- Culture Fresh Foods, an upstart plant-based dairy producer, raised $11M in Series A funding led by CEI Ventures and FreshTracks Capital.
More from Fitt Insider >> The Future is Plant-Based
NYC expands DTC healthcare:
- Capsule, a NY-based pharmacy and delivery service, raised $200M to expand beyond NYC.
- Heal, a leading medical house call provider, acquired Doctors on Call, a NY-based house call network.
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