Issue No. 163: Year-End Review

Illustration: Courtney Powell

As 2021 comes to a close, today, we’re looking back at key developments from the year that was.

Then, next week, we’ll share our annual outlook for what’s next in fitness and wellness.

Let’s get into it!

Unbundling the Gym

Back to business? Last year, gyms and studios struggled. In 2021, they hoped to rebound.

A bright spot, this summer, gym visits were on the upswing. By fall, Planet Fitness, Crunch Fitness, and Xponential Fitness saw memberships near pre-pandemic levels. More good news, ClassPass data shows in-person fitness bookings increased 329% this year.

But, as the Omicron variant surges, gyms aren’t out of the woods. A setback, SoulCycle once again requires masks during class. Taking no chances, NYC-based Fhitting Room temporarily closed its studios.

Back to reality. COVID-era lockdowns created a connected fitness frenzy, but the pandemic bubble may have burst.

Investment activity kept pace, as Tonal ($250M), Tempo ($220M), FightCamp ($90M), and others added new funding. Consumers, however, are losing stamina.

A proverbial canary in the home gym, Peloton has seen sales and engagement slow.

More red flags: Beachbody and Nautilus also saw growth stall, lululemon cut MIRROR’s 2021 sales forecast in half, and equipment maker iFIT postponed its public offering.

Related fitness headlines:

TBD. Prioritizing convenience and personalization, consumers are in the driver’s seat. At home or in person, brands are rethinking their value proposition.

WFH Wellness

The Great Resignation. After nearly two years of uncertainty, workers are calling it quits. Hoping to attract and retain talent, employers are prioritizing workforce well-being.

The result? From mental health to musculoskeletal (MSK) care and fitness, corporate wellness is an increasingly competitive and lucrative sales channel — one that’s expected to reach $94B by 2026.

Peace of mind. As employers confront record levels of burnout, B2B mental health startups are suddenly worth billions. See: Cerebral ($4.8B), Lyra Health ($4.6B), Spring Health ($2B), and SonderMind ($1.1B). Moving beyond mindfulness, Headspace merged with Ginger to create a $3B mental healthcare company.

Pain point. Chronic pain and injuries stemming from MSK conditions have created a trillion-dollar market. Selling through employers and health plans, movement health startups are cashing in — Hinge Health is worth more than $6B, SWORD Health is valued north of $2B, and Kaia Health raised $75M this spring.

Pump it up. As competition and acquisition costs increase, fitness brands are also targeting employer-subsidized growth. Peloton announced its B2B offering this summer. Personal training app Future is scaling enterprise sales. And, after paying its own employees to sleep more, WHOOP is moving into workplace wellness.

Bringing together gyms, studios, and apps, corporate well-being aggregator Gympass was valued at $2.2B in a $220M funding round this summer.

High-Performance x Health

Precision wellness. Picking up where biohacking and the quantified self left off, high-performance health is pushing the limits of wearables, home diagnostics, and personalized well-being.

Paradigm shift. As the billion-dollar fitness wearables market intersects with the trillion-dollar healthcare sector, the sector has shifted from step counting to health monitoring.

Tracking REM sleep, heart rate variability, and blood oxygen levels, WHOOP and Oura secured new funding this year, adding $200M and $100M, respectively. Moving in, Big Tech sees wearables as a wedge into healthcare, with AppleAmazon, and Google all doubling down.

DIY diagnostics. From food sensitivity to fertility and the microbiome, at-home test kits are in high demand. Seizing the opportunity, Everlywell raised $250M, notching a $3B valuation and rebranding to Everly Health. Similarly, LetsGetChecked landed $150M at a $1.5B valuation.

Pursuing personalized nutrition via at-home tests, ZOE secured $53M in funding. Plus, startups like Vessel, Vivoo, and Dieta Health added investments for urine and stool tests.

Rest and recovery. A counterpoint to hustle culture, recovery has become a big business. Wearables like WHOOP are championing “readiness.” Expanding their platforms, Hyperice acquired Core and Therabody bought PowerDot. Aiming to improve sleep fitness, Eight Sleep raised $86M.

A different approach, recovery studios, including Restore and Pause, are attracting investments as they scale up.

Metabolic Health

Weight of the world. As rates of obesity and diabetes reach all-time highs, startups are hoping to make an impact and profit. In particular, 2021 was the year of digital weight management and continuous glucose monitoring.

Diet tech. Digital weight loss platforms have seen rapid growth, with Calibrate raising $122M and Found netting $124M this year. Focusing on diabetes reversal, Virta Health raised $133M at a $2B valuation. And Noom closed $540M, valuing its digital health coaching and diet app at $3.7B.

CGM. Helping move metabolic health into the mainstream, continuous glucose monitoring startup Levels added $6M in funding at a $300M valuation. In a flurry of activity, Supersapiens, January AI, and Veri also secured investments as they pushed into the space.

A New Era of Recreation

Ending inactivity. Promoting physical activity for all—not fitness for some—should be a top priority. A silver lining of the pandemic, a return to nature and outdoor recreation is gaining momentum.

Hit the trail. Approaching $1 trillion in value, the US outdoor recreation economy saw record levels of hiking, camping, and national park visits during the pandemic. Leveraging technology to increase access, AllTrails secured $150M in funding, Hipcamp (the “Airbnb of camping”) closed $57M, and media company Outside secured $150M.

The endurance economy. According to Strava’s annual report, running and cycling have never been more popular. As endurance intersects with broader trends in digital fitness and the rise of the quantified athlete, expect endurance tech to produce multiple billion-dollar exits.

The Recreationalist. Beyond activities like biking and hiking, organized games and social experiences are on the rise. For example, participation in pickleball has jumped 21% since 2019. Internationally, pickleball’s cousin padel has followed a similar arc toward 12M+ players and a $600M market.

On deck: We covered a lot of ground this year. While this was our best attempt at distilling 52 weeks’ worth of newsletters into key themes, be sure to tune in next week for the forward-looking trends report.

🚲 Smart Cycling

Catering to endurance athletes, innovative hardware and software providers are tapping into a growing market.

On the Fitt Insider Podcast: TrainerRoad co-founder and CEO Nate Pearson joined us to discuss the company’s Adaptive Training platform that uses machine learning to help cyclists get faster.

We also cover: the convergence of endurance tech, connected fitness, and the casual exercise seeker.

Listen to today’s episode here

🧢 Experiential Athleisure

Alo Yoga is expanding its retail efforts, leaning into music, entertainment, and wellness education.

From clothing to digital workouts and skincare, Alo is a multifaceted brand earning upwards of $200M in annual revenue.

According to co-CEO Danny Harris, 90% of that revenue is digital, either through ecommerce or its fitness platform. But, Harris adds, retail locations play a key role:

“To be able to have a physical presence, where people are able to embody what we believe… is really a great thing for the brand. And a great thing for the community.”

Reimagining retail. Beyond merchandise, some Alo stores house yoga studios. And its NYC Flatiron location includes a plant-based, rooftop restaurant. Plus, the company hosts Alo House pop-up experiences.

Eyeing an international presence, Harris told WWD the brand is considering stores in Canada, London, Paris, Israel, and Dubai.

In the meantime, Alo is expanding its LA headquarters to include a recording studio and podcast rooms, adding to the existing gym, yoga studio, and movie theater. As Harris described it:

“This is going to be the epicenter of health and wellness and education of the world.”

The new storefront. Across the industry, activewear brands are all-in on experiential shopping.

  • Prioritizing community over sales, UK-based Gymshark is set to open its first brick-and-mortar location.
  • On Running’s flagship store features a “magic wall” that analyzes customers’ running styles in real time.
  • Part of its connected fitness strategy, lululemon is expanding MIRROR shop-in-shop displays.

Speaking of connected fitness, brands like Tonal, CLMBR, and Hydrow are leveraging retail partnerships to reach potential customers in person.

Punchline: While direct-to-consumer sales are valuable, brick-and-mortar experiences are helping brands build community beyond a digital transaction.

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🍄 Tripping on Wellness

As psychedelics go mainstream, wellness retreats offer a safe haven.

  • Psychedelic wellness retreat and training hub Synthesis Institute closed a $7.25M Series A in September.
  • Addiction care company Universal Ibogaine recently listed on the Toronto Exchange and acquired Kelburn Clinic to support its psychedelic-based treatments.
  • Oregon-based Silo Wellness teamed up with Mushe to set up mushroom outlets in Jamaica, bolstering its psychedelic wellness vertical.

Acid redux. Before the pandemic, psychedelic retreat growth was up 73% in countries where the substances are legal, such as Jamaica, Costa Rica, and the Netherlands.

As travel inches back to pre-2020 levels, the psychedelic tourism market is gaining traction once again from those beyond the boho movement. As Paul Austin, founder of both Synthesis and Third Wave, points out:

“We get lots of wealthy professionals who are either looking for spiritual growth, or to help boost creativity. We’ve had a cross-section of both male and female professionals, from doctors, and investment bankers, to film directors, CEOs, and start-up founders.”

Set and setting. As psychedelics gain acceptance, many believe they will fundamentally change how we treat mental health. An important factor, the conditions you’re in can seriously influence your trip, for better or for worse.

For those seeking to capture the full benefits of a psychedelic experience, hopping on a plane to a wellness center—with trained shamans, pleasant accommodations, and even medical screenings—is appealing.

Some caveats. Critics have taken issue with wealthy, foreign visitors co-opting ancient indigenous practices and ceremonies. Meanwhile, a number of troubling sexual assault scandals have caught the public eye.

Next up, wellness tourism is expected to soar to $1.2T by 2027. Anticipating a pandemic-driven boom, health guru Deepak Chopra is pursuing a series of integrative health retreats.

Punchline: The line between wellness and hallucinogenic trips is blurring. As psychedelic tourism heats up, retreats will provide an all-inclusive solution for a growing number of trippers who are unwilling to wait for legalization.

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📰 News & Notes

  • Hyatt launches “Zero Proof” alcohol-free beverage program.
  • New year, new job? Explore hundreds of health and fitness openings.
  • Startup Q&A: Health optimization with InsideTracker’s Dr. Gil Blander.
  • Amazon demotes PillPack co-founders and former Pharmacy leaders.
  • VR fitness company Supernatural teams with Tiffany Haddish for workout series.
  • Orangetheory Fitness hires former Nike exec Ryan Flaherty as chief fitness & product officer.

💰 Money Moves

  • Indian health and fitness company acquired connected treadmill brands OneFitPlusRPM Fitness, and Fitkit, as well as bike maker Urban Terrain.
  • Kiira Health, a digital healthcare platform for young multicultural women, closed a $4M seed round led by 500 Global and Forum Ventures.
  • Finnish oat milk producer Oddlygood raised $28M in funding and will launch its consumer products in the US.
  • Yumi, a DTC organic baby food company, landed $67M in a Series B round led by JAZZ Venture PartnersAF Ventures, and Anne Wojcicki of 23andMe.
    More from Fitt Insider: The Rise of Famtech 
  • Swiss digital health company Xsensio, makers of a wearable collecting biomarkers from skin contact, secured CHF 4.2M ($4.59M) in international financing.
  • Gaia, a streaming yoga video platform, acquired digital media publication Yoga International. Terms of the deal were not disclosed.
  • Psychedelics research startup Maya Health, developers of a decentralized platform for sharing patient and therapist data, raised $4.3M in new funding.
  • MAXPRO Fitness, creators of a portable pulley device for resistance training, raised $500K from Mark Cuban after appearing on Shark Tank.
  • Personalized metabolic health and nutrition firm ZOE received an undisclosed Series B contribution from Balderton Capital.
    More from Fitt Insider: Gut Check
  • Level 5 Capital Partners and its subsidiary, L5 Fitness, acquired 112 Orangetheory Fitness franchises across five states.

Today’s newsletter was brought to you by Anthony and Joe Vennare, Melody Song, Wesley Yen, and Ryan Deer.

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