Issue No. 177: Buy vs. Build

Illustration: Courtney Powell

With the future of fitness in flux, opportunistic acquirers could reshape the industry.

The Latest

Private equity firm HighPost Capital acquired Chris Hemsworth’s digital fitness app Centr and equipment maker Inspire Fitness.

Bundling content and equipment, the newly formed entity is valued north of $200M — with the combined company operating under the Centr banner going forward.

Inspire. The company manufactures everything from squat racks to free weights and cardio machines. Building a hybrid ecosystem, Inspire’s SoCal boutique studio doubles as a production space for its existing fitness app.

Centr. Founded by actor Chris Hemsworth, the health and nutrition app counts 200K global users. Of note, Centr was created in partnership with Loup, makers of digital fitness programs for the likes of Hemsworth and celebrity instructor Emily Skye.

Interestingly, in 2015, Loup was acquired by Fitness & Lifestyle Group to bolster the brick-and-mortar operator’s digital arsenal.

HighPost. Co-founded by Jeff Bezos’s younger brother Mark, the consumer-focused PE firm is investing upwards of $500M across sports, media, health, wellness, leisure, and lifestyle.

Talking merger, HighPost co-founder and CEO David Moross said the two profitable companies are poised for subscriber growth and expanded retail distribution.

Star Power

Putting the pieces together, Hemsworth’s celebrity is central to this deal.

The man behind Thor, Hemsworth has amassed more than 85M social media followers. On Instagram, his post announcing Centr’s acquisition garnered 930K likes.

Speaking to Hemsworth’s reach, HighPost’s Moross said the company has only tapped a small fraction of the celeb’s audience. Doubling down, Moross expects Centr to easily eclipse 700K users within four years.

Nothing new, health and fitness brands have long relied on star power to stand out.

  • Actor Mark Wahlberg invested in HIIT studio F45 Training, earning a $200M+ profit.
  • Comedian Kevin Hart serves as Hydrow’s creative director, in addition to investing in the connected rower.
  • Brands like Hyperice, Tonal, and WHOOP are running the athlete-as-investor playbook to perfection.

The rationale is simple: In a world of fleeting attention and rising customer acquisition costs, athletes/celebrities provide clout and authentic distribution to an engaged audience.

Going beyond marketing partnerships or investments, influencers and celebrities have built powerful wellness empires:

  • In July 2021, iFIT acquired Kayla Itsines’ SWEAT app for $300M.
  • Aubrey Marcus and Joe Rogan sold supplement company Onnit to Unilever in a “nine-figure” deal.
  • Testing the IPO waters, Kate Hudson’s athleisure brand Fabletics could be valued at more than $5B.
  • Paleo blogger Mark Sisson sold his healthy condiments company Primal Kitchen to Kraft Heinz for $200M.

Next up. Armed with more leverage than the brands themself, fitness creators are becoming bonafide founders and acquisition targets in their own right.

While platforms like Playbook and FitOn tap personalities like Devon Lévesque and Cassey Ho, respectively, Megan Roup’s Sculpt Society and Joe Wicks’ The Body Coach are fitness forces to be reckoned with.

Shifting Strategies

Instead of building from scratch, the stage is set for industry-wide M&A.

Flush with capital, the recent era of connected fitness was defined by vertically integrated platforms. But, slowly, open ecosystems and content/hardware/software partnerships are taking hold.

A different approach, the roll-up could become an attractive strategy.

What could have been: Early on, SoulCycle and Flywheel both passed on partnering with Peloton. While Flywheel ultimately shuttered operations, Soul’s parent company Equinox endured a series of challenges while assembling its at-home offering.

Later, at its peak, Peloton’s $50B+ market cap gave it a sizeable war chest to acquire complementary brands, from WHOOP to Tonal or Hydrow. Instead, believing the workout-from-home gold rush would never end, the company set out to develop its own products.

What could still be: With consumers opting for omnichannel exercise offerings, a deep-pocketed acquirer could assemble a platform for the future of fitness.

In the boutique studio realm, Xponential Fitness successfully executed this plan, taking its portfolio of brands public last year.

Elsewhere, with nearly $700M in funding and a valuation of more than $1B, India’s has acquired a host of companies in an effort to build its fitness empire. Easier said than done, recent reports point to rising losses.

More recently, FitLab secured $15M to scale its integrated fitness platform. Bolstering its existing portfolio, the company also acquired digital fitness app Fitplan, adventure running series Ragnar, and action sports brand Electric.

Punchline: Whether it’s a private equity-backed effort, a fitness consolidator, or an industry outsider (Amazon), Centr x Inspire could usher in a wave of deal-making to rival the recent flurry of activity.

😌 Mental Wellness As Recovery

As health optimization takes hold, mental fitness has become critical for high performance.

On the Fitt Insider Podcast: Sarah McDevitt, founder of Core and Head of Mind Technologies at Hyperice, joins us to discuss her handheld meditation trainer at the intersection of mindfulness and technology.

We also cover: its acquisition by recovery tech company Hyperice and Core’s rapidly scaling B2B business.

Listen to today’s episode here.

🏕 The Outerverse

Digital media company Outside is launching an “anti-metaverse” NFT marketplace.

Dubbed the “Outerverse,” the Solana-built domain will sell limited-edition NFTs called the Outerverse Passport, encouraging owners to get out in the wild instead of spending more time on screens.

Minting in June, the NFT will provide plenty of real-world utility:

  • A three-year subscription to Outside+, unlocking content and perks
  • Early access to future NFTs designed by outdoors-focused artists and creators
  • Rewards linked to outdoor activity tracked by Outside-owned Gaia GPS, as well as other wearables

In related news: Earlier this year, National Parks NFT launched, serving as a membership to a club for outdoor enthusiasts while supporting the National Park Foundation. An extension of web3 fitness, move-to-earn is hitting the hiking trail.

Zooming out: From camping to rock climbing, as technology intersects with the booming outdoor economy, increasing access to adventure is a multi-billion-dollar opportunity in the making.

💪 Social x Fitness

Snapchat’s newest feature lets you send fitness challenges to friends.

What it is: After the success its GYM HEROES fitness channel, Snap is teaming with Wave Sports + Entertainment to launch GYM HEROES Mini — a series of daily fitness sessions hosted by top influencers.

Teaming up. Intended to be a social experience, the Mini makes it easy for exercisers to challenge friends and participate in groups. Beyond digital communities or instructor-led workouts, Snap could put its own spin on Social+ Fitness.

It’s just the latest wellness-focused product from Snap:

  • In November 2021, Nike and Snapchat created an AR running experience using Snap’s next-gen Spectacles.
  • Late last year, Snap launched Food Scan, a computer vision-aided food scanning app to help identify ingredients and recommend recipes.
  • This March, Snap Labs acquired NextMind, a brain-computer interface company using EEG to control AR experiences.

Punchline: With health and physical activity becoming a part of every tech company’s playbook, Snap is leaning in.

🚲 Pedaling Content

Netflix is doubling down on the success of its Drive to Survive F1 docuseries, ordering a behind-the-scenes look into the Tour de France.

Need to know: The Tour de France is one of the most-watched sporting events in the world. And the sport of cycling is on the rise.

What to watch for: As the endurance sport economy booms, the Tour de France is seeing more athlete activation than ever. Its partnership with Strava unlocks daily cyclist data and photos as content. And the Netflix deal will promote the sport with cinematics.

Also in the works: Netflix is reeling in more eyeballs with forthcoming series for the ATP Tour, WTA Tour, and PGA Tour.

Cashing in. While the F1 series brings more passionate fans into the mix, very few of them will ever drive a racecar. But, with road cycling becoming even more accessible through in-home trainers like Zwift, and recreational sports like tennis and golf heating up, Netflix’s coverage is sure to boost participation and equipment sales.

📰 News & Notes

💰 Money Moves

  • Smart ring maker Oura secured a “meaningful amount of capital,” valuing the company at more than $2.5B.
    More from Fitt Insider: Oura’s Billion-Dollar Breakthrough 
  • Private equity firm HighPost Capital acquired and merged Chris Hemsworth’s fitness app Centr and equipment manufacturer Inspire Fitness. Terms were not disclosed.
  • Flexia, makers of a connected Pilates reformer, raised $4M in a seed round led by ADvantage.
    More from Fitt Insider: Our conversation with Flexia CEO Kaleen Canevari
  • Food-as-medicine provider Season Health grabbed $34M in Series A funding led by a16z.
  • GOQii, an Indian health & fitness app, raised $10M in an extended Series C round led by Animoca Brands to launch its health metaverse.
    More from Fitt Insider: web3 x Fitness
  • German sound wellness company Endel, a startup using AI-recommended soundscapes to improve mood and sleep quality, secured $15M in Series B funding.
    More from Fitt Insider: 
    The Zzz Economy
  • UK-based workplace mental health platform Oliva raised £4.84M ($6.39M) in seed funding.
  • India-based men’s and women’s health startup Janani pulled in $2.2M in a funding round from Y CombinatorOlive Tree Capital, and others.
  • At-home diagnostics company LetsGetChecked acquired Veritas Genetics, a personal genomics startup.
  • Digital mental healthcare platform Brightside Health grabbed $50M in a Series B round co-led by ACME Capital and Mousse Partners.
  • Circle Sportswear, a French activewear company focused on sustainability, secured €2.5M ($2.76M) in new funding.
    More from Fitt Insider: The Business of Sustainability
  • Israeli health tech firm Sency, developers of computer vision-assisted fitness products, added $6.5M in a funding round.
    More from Fitt Insider: The Rise of AI Trainers
  • MycoTechnology, makers of mycelium-based protein powders, landed $85M in a Series E round.
    More from Fitt Insider: The ’Shroom Boom
  • UK-based Caterpillar, a fitness rewards app, raised £450K ($590.2K) in new funding.
  • Belgian protein bar maker EMPWR acquired Canadian nutrition bar maker Noble Foods for an undisclosed sum.
    More from Fitt Insider: Nutrition Bars Cash In
  • Inner Cosmos, a brain-computer interface designed to treat depression, secured $10M in a seed round led by lool Ventures.

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

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