Insider No. 73: A Tipping Point

In recent weeks, with business closures in effect, digital fitness offerings and equipment providers have experienced record demand. Meanwhile, brick-and-mortar providers are reeling, streaming workouts and renting out equipment just to get by.

Zooming out: As operators and onlookers debate the merits of convenience versus community, and whether or not fitness will ever be the same, consumer behavior could reach a tipping point in a number of categories.

The big picture: From wearables to mental health and fundamental changes to our healthcare system, here’s how COVID-19 is impacting the broader wellness landscape.

Mental Health

As anxiety climbs, mental health startups are experiencing increased demand. Between December 29 and March 1, the average hours spent on mental health and fitness apps surged 30%, according to data tracking company App Annie.

In March, Headspace users logged meditation sessions 13 times more often than in the previous month. Likewise, member requests for anxiety-reducing content doubled. And, since mid-March, there has been a 400% increase in interest from companies not using the app, seeking to support employees’ mental well-being.

Similarly, teletherapy companies like TalkspaceGinger, and AbleTo have reported increases of 25% or more.

Wearables

Fitness and sleep tracking wearables like WHOOP, Oura Ring, and Apple Watch are proving useful in the early detection of coronavirus.

The Cleveland Clinic, CQUniversity in Australia, and WHOOP have joined forces, using the startup’s wrist-worn strap to investigate a potential connection between changes in respiratory rate and COVID-19 symptoms.

Using the company’s smart ring, Oura and The University of California, San Francisco have launched a study to observe links between body temperature and the onset of coronavirus.

Similarly, Apple Watch owners can use their device and the Cardiogram app to monitor their body’s response to COVID-19.

Related: With campus and training facilities closed, football players at the University of Alabama are wearing Apple Watches so coaches can assign and monitor their workouts remotely.

Telemedicine

With pandemic-induced urgency, lawmakers, healthcare providers, and patients are adopting new digital tools.

The University of Pittsburgh Medical Center, which operates 40 hospitals, conducted more remote visits in a recent 48-hour period than in all of 2019. And Teladoc Health, the US’s largest virtual care provider, saw virtual visits jump 50% — the company is now reporting over 100,000 appointments weekly.

The emergency response to COVID-19 has also seen key barriers to virtual care lifted.

The federal government removed restrictions on telehealth services for Medicare patients. As part of the $2T CARES Act passed, the FCC plans to spend $200M to support telehealth programs. And in-state licensing for healthcare providers has been waived, which could accelerate the adoption of telemedicine.

The bottom line: As efforts to combat COVID-19 bring about innovation and regulatory easing, consumers will embrace new products and different ways of interacting with companies. While some changes will be temporary, others will stick, creating new challenges and opportunities for battle-ready operators.


😣 Tough Times

With gyms and studios closed, layoffs hit two of the fitness industry’s biggest platforms.

At MINDBODY700 employees of the company’s 2,000-member global workforce were notified via email that they had been laid off or furloughed.

“If you’d asked me, ‘is there anything that could possibly happen that could shut down all 60,000 of our customers at once?’, I would have said: ‘No, that’s impossible.’ But that is exactly what is going on right now.” – Rick Stollmeyer, MINDBODY CEO

  • MINDBODY CEO Rick Stollmeyer said the deepest cuts were in the sales and marketing department.
  • For his part, Stollmeyer will forgo a paycheck for the remainder of the year, and other executives are taking pay cuts.
  • Stollmeyer said the cuts were necessary to “protect the business for the long term”, telling the San Luis Obispo Tribune: “If we didn’t take prompt action, we would burn through our cash reserves in a matter of months, and that’s just unacceptable.”

At ClassPass, staffing changes impacted 53% of a 700-person workforce.

“Today was the worst day of my career. We said goodbye to a lot of incredibly talented and decent colleagues as COVID-19 has obviously had a catastrophic impact on the fitness/wellness industry.”  – Fritz Lanman, ClassPass CEO via Twitter.

  • Hundreds of employees are being affected, with 22% laid off and 31% furloughed.
  • According to CNBC, senior leadership at ClassPass relayed news of the cuts to staff via separate Zoom calls — one to a group whose jobs were safe and another to the group whose jobs were permanently or temporarily cut.
  • ClassPass has seen 95% of its revenue dry up recently as nearly all of its 30,000 studio partners were forced to close.

Looking ahead: While MINDBODY and ClassPass have both pivoted to short-term digital fitness solutions, the longer gyms and studios remain closed, the more dire the situation becomes for these billion-dollar software providers.

💪 Strength + Studio

In last week’s newsletter, we teased the upcoming launch of a new connected fitness company with a link. The result? It was the most-clicked link in the email with thousands of people anxious to learn more.

Well, the mystery company has started to emerge from stealthMeet Forme Life.

Combining the full-length display screen of Mirror with a Tonal-like strength training system, Forme hopes to appeal to a broader base of exercisers than group fitness (Mirror) or strength training (Tonal) alone.

At a high-level: Home exercise options fit into three categories:, group or studio fitness, cardio equipment, and strength training. As the category becomes more competitive, companies are taking different approaches to stand out.

  • Peloton: multiple pieces of equipment and a standalone app.
  • Mirror: one screen for group fitness and personalized instruction.
  • Tonal: one device for strength training and personal coaching.
  • Forme: one device for group fitness, strength training, and instruction.

Looking ahead: With new entrants like SoulCycle, the Studio + Huami treadmill, and Ergatta’s rower seeking to break through, all while legacy companies like ICON Health & Fitness play catch-up, companies will be forced to find new and novel ways to differentiate themselves.

📰 News & Notes

💰 Money Moves

  • SonderMind, a behavioral health company, closed $27M in Series B financing. 
  • SteadyMD, a telemedicine platform, secured a $6M Series A funding round.
  • The Primal Pantry, a plant-based snack brand in the UK, has been acquired by Nurture Brands for an undisclosed sum.
  • Vericool, a maker of plant-based packaging, raised $19.1M to replace plastic coolers.
  • SportsEdTV, a video-based sports training startup, closed a $3M Series A funding round.
  • GrubMarket, a food e-commerce company, acquired Boston Organics, an online farm-to-table grocery delivery service. Terms were not disclosed.

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