Welcome to the Fitt Insider Weekly Debrief. Every weekend, we compile the top stories impacting the business of fitness and wellness from the past week.
Here’s what you need to know for October 17, 2021…
- Mindbody acquired ClassPass
- LeBron invested in Tonal
- Health & fitness startups to know
- Vuori raised $400M at a $4B valuation
Meet up in NYC? Fitt Insider co-founder Anthony Vennare will be in New York City November 1–6. Want to connect? Email firstname.lastname@example.org
Mindbody x ClassPass
Wellness booking platform Mindbody is acquiring subscription-based fitness marketplace ClassPass.
Terms of the all-stock agreement were not disclosed. Part of the deal, Mindbody added $500M in new funding led by global investment firm Sixth Street.
How we got here: The pandemic’s impact on gyms and studios led to revenue declines and layoffs at both companies. Lingering shutdowns and uncertainty about the future of brick-and-mortar fitness prompted Mindbody and ClassPass to explore a merger earlier this year.
For context: Pre-COVID, Mindbody served some 60K health and wellness businesses. In 2018, Vista Equity Partners acquired the company for $1.9B. Meanwhile, after a number of pivots, ClassPass reached a $1B valuation in early 2020, raising $285M in Series E funding.
From the podcast:
- Our interview with Mindbody CEO Josh McCarter
- ClassPass CEO Fritz Lanman on the Fitt Insider Podcast
Looking ahead: A result of this mega-merger, studio owners and other software providers will be forced to reassess where they fit in.
Tonal x LeBron
LeBron James is partnering with Tonal as an investor and brand ambassador.
Part of the terms, James will contribute to product development, social content, and workout programming. He’ll also be the face of Tonal’s upcoming ad campaign.
Bulking up. Valued at $1.6B following a $250M funding round this spring, Tonal is a leader in the connected strength training category.
- According to the company, it has “90% market share” in connected strength.
- Sales have increased 800% during the pandemic, with members working out for ~40 minutes every other day.
- Tonal teamed with Nordstrom to open 40 shop-in-shops, in addition to physical locations of its own.
Team effort. James joins a long list of athlete investors to back Tonal, including Stephen Curry, Serena Williams, Mike Tyson, Maria Sharapova, and many others. According to the company, hundreds of other pro athletes use the company’s connected device.
Efficiency is everything. A huge get for Tonal, courting James is sure to pay dividends — especially since the company is reportedly testing the IPO waters.
So, why did LeBron get on board? In his telling, Tonal’s tech delivers unmatched efficiency:
“Every person striving for greatness must prioritize efficiency… and the technology [Tonal] uses to maximize efficiency while still doing a complete workout is a perfect fit.”
A perfect fit, indeed — bringing efficiency to strength training was the aha moment that led Tonal founder Aly Orady to start the company.
Looking ahead: Coming full circle, Orady hopes James can help Tonal boost sales and stand out in an increasingly competitive connected fitness market. If his track record—and immense social media following—is any indication, James is about to pump Tonal up.
Startups to Watch
Last week, on LinkedIn, we asked: “What’s an under-the-radar health & fitness startup?”
So far, nearly 300 people have replied by tagging up-and-coming companies. If you’re a founder, investor, or just curious about what’s next in fitness and wellness, you should check out the post.
Keep the thread going! Tag a company to know in the comments. And if you’re launching or raising money for your startup, reach out here — we invest in early-stage health, fitness, and wellness companies.
Vuori Lands $400M, Eyes Global Expansion
Activewear upstart Vuori is now worth $4B, following a $400M investment from SoftBank.
Founded six years ago, the coastal Californian brand has largely flown under the radar. But when the pandemic hamstrung retail, Vuori outmaneuvered other brands, nearly tripling revenue, and has since amassed a loyal following.
- The brand employs a diverse mix of sales channels, from wholesalers to DTC, helping it pivot when buying habits shifted from brick-and-mortar to laptop.
- Following store closures, Vuori quickly reallocated retail talent, training “omni-associates” to support ecommerce in areas like customer service or online returns.
Plotting its growth, Vuori is hiring top talent and plans to expand from 10 to 100 physical locations by 2026.
Of note, this deal comes in the wake of several big activewear bets:
- Wolverine Worldwide bought women’s activewear brand Sweaty Betty for $410M in August.
- Levi Strauss and Co. added Beyond Yoga to its portfolio for $400M in late September.
- Gymshark is exploring a public offering after a $300M investment valued the company north of $1.3B last year.
Punchline: As indie activewear brands tap into fast-growing niches like women-focused and sustainability, they’re steadily gaining on industry incumbents. Ahead, Vuori will face stiff competition in an effort to grab a hefty slice of the expanding activewear pie.