Issue No. 194: Meta x VR Fitness

Illustration: Courtney Powell

Meta CEO Mark Zuckerberg wants to monopolize the metaverse… including VR fitness.

The Next Big Thing

Difficult to define and largely theoretical, the metaverse is an immersive online realm seamlessly integrating our physical and digital lives.

Like personal computing and the mobile internet before it, there’s a growing belief that the metaverse is the next big thing.

  • By 2030, global metaverse spending could reach $5T, per McKinsey.
  • So far this year, investors put $120B+ into metaverse-related companies, up from $57B last year.

Interfaces for experiencing the metaverse, Apple, Google, and others are developing AR/VR devices to rival Meta Quest — as Meta builds new mixed reality headsets to keep pace in a growing market.

  • The global AR/VR market is projected to reach $454.7B by 2030.
  • By 2026, global shipments of AR/VR headsets will top 50M, up from 11M in 2021.

From a technological standpoint, these devices and the world they connect to are still taking shape. Another hurdle, 60% of consumers are unfamiliar with the metaverse, while many experts doubt it will impact daily life within two decades.

Undeterred, Zuckerberg is so bullish on the metaverse, he changed Facebook’s name to Meta last year, burning upwards of $10B on his vision in 2021 alone.

Into the Meta-verse

Comparing Quest to Peloton, Zuckerberg thinks immersive exercise is the future of fitness.

Driving this belief, Meta hopes VR workouts bring new users and developers to the platform, expanding its content ecosystem to create further network effects.

  • 2014: Acquired VR headset maker Oculus for $2B.
  • 2019: Acquired Beat Games, creator of VR workout app Beat Saber.
  • 2021: Announced plan to buy Within, developer of VR fitness app Supernatural.

Not so fast… Last week, the Federal Trade Commission (FTC) said it’s blocking Meta’s $400M acquisition of Supernatural.

Combining interactive environments, on-demand workouts, and hit music, Supernatural launched in 2020. Rising during the pandemic, CEO Chris Milk said “fitness is the killer use case for VR,” and his company is leading the way.

Citing Milk’s statement, the FTC said this acquisition is part of Zuckerberg’s plan to be “completely ubiquitous in killer apps” by copying, acquiring, or crushing the competition.

War of words. While the FTC believes this move signals monopolistic intentions, Meta argues its actions aren’t anti-competitive but additive to the VR ecosystem, writing:

“fitness-specific app developers… don’t see us as their current or future competition.”

Contrary to this claim, developers have spoken out about Meta’s VR app store, criticizing the company’s pricing model and app approval process.

And YUR co-founder Cix Liv previously accused Meta of copying his startup’s VR fitness tracking tech, tweeting that the tech giant “blocks, breaks, and kills successful VR companies.”

Game On

From gamification and exertainment to AR/VR workouts, new technologies are redefining fitness.

Hoping to reach younger generations and consumers beyond the already fit, more companies are pursuing game-based exercise offerings.

  • FitXR, Black Box, Blue Goji, and Virtuix are pushing further into VR.
  • Zwift, Ergatta, Quell, Playpulse, and Aviron are built around gaming.
  • Peloton and Freeletics entered gaming; Liteboxer and Les Mills entered VR.

At the same time, as innovation accelerates and new digital worlds emerge, where and how consumers engage with fitness content will evolve.

  • Alo YogaNike, and DICK’S Sporting Goods launched on Roblox.
  • Boutique studio TRIB3 entered The Sandbox with help from OliveX.
  • SweatcoinSTEPN, and Genopets reward exercise with crypto and NFTs.

The big picture: For now, mass adoption of these platforms may be years away. Likewise, Zuckerberg’s vision of the metaverse may never come to fruition.

Still, for fitness operators, the momentum and funding behind these efforts has far-reaching implications.

In addition to competing with gyms/studios and digital/at-home options, tech titans like Meta and Apple are pushing further into fitness — where Quest and Fitness+ control the hardware, software, and user data.

Meanwhile, as the underlying technology improves and new virtual worlds emerge, omnichannel fitness will expand to include AR/VR experiences in gyms, homes, the outdoors, and more.

Punchline: All signs point toward new technology disrupting fitness as we know it. While the FTC battles Meta to determine who owns the rails, the more pressing question remains: Will all this novelty make us any healthier?

💪 Smart Strength

Like spin bikes and treadmills, strength training is getting a high-tech upgrade.

On the Fitt Insider Podcast: Vitruvian founder Jon Gregory shares the story behind his company’s AI-powered strength equipment.

We also cover: the company’s recent $15M funding round and the challenges facing connected fitness brands.

Listen to today’s episode here

🛑 HIITing the Breaks

F45 Training is cutting jobs and changing CEOs.

Downsize. Citing “ongoing macroeconomic uncertainty,” F45 laid off 45% of its corporate staff as its hypergrowth strategy stalled.

Slashing 2022 projections, F45 revised its full-year outlook:

  • Net new franchises sold: 350–450, down from 1.5K
  • Net initial studio openings: 350–450, down from 1K
  • Revenue: $120–130M, down from $255–275M
  • Adjusted EBITDA: $25–30M, down from $90–100M

Reorg. The publicly traded fitness studio franchisor also announced Adam Gilchrist’s exit from the chief executive role.

While the company searches for a replacement, F45 co-founder and former CEO Rob Deutsch is pulling no punches, writing in a now-deleted Instagram post:

“Never in my wildest dreams could I have imagined this. When I exited, and sold out of F45, I left a healthy, phenomenal, beast of a business.” 

Now, despite F45’s recent efforts to fast-track franchisee development and enter country clubs, military bases, office buildings, and hospitality, its outlook is uncertain.

Zooming out: Rebounding after pandemic lockdowns, gyms have been gaining ground while at-home fitness companies faced slowdowns and layoffs — with PelotonTonalHydrowiFIT, and others reducing their workforce.

Looking ahead: F45’s woes signal the far-reaching impact of the economic downturn, lingering effects of shuttered studios, and some operational miscues. Not alone, gym operators that were chasing growth will likely need to plot a more sustainable course.

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↪️ Move-ing On?

Distancing itself from bulky hardware, Tempo is shifting its focus to smaller, rentable equipment and a flexible membership.

The details: Tempo is bundling its Move product, form-tracking app, digital content, and 1:1 coaching into a new $59/month membership, with no upfront hardware costs.

How we got here: Founded in 2015, Tempo (fka SmartSpot and Pivot) initially launched as an in-gym solution before entering the at-home market with its $2,500, six-foot-tall “Studio” unit.

Last fall, the company unveiled Move, a $395 modular cabinet with 35 pounds of weight and a smartphone dock, capable of syncing with any television.

Rethinking its business model, Tempo said its latest offering gives members greater flexibility and support.

Why now? Tempo CEO Moawia Eldeeb told Fitt Insider connected fitness makers should prioritize compact equipment, affordable pricing, and personalized experiences.

Checking these boxes, Tempo’s new membership and redesigned homepage make virtually no mention of Studio, bringing Eldeeb’s stated strategy to bear.

Mass appeal. Like Tempo, as demand for expensive at-home equipment slows, brands are shrinking their products and price points to attract more customers.

  • Peloton is testing an $89/mo. rent-a-bike membership.
  • Hydrow introduced Wave, a smaller, cheaper rowing machine.
  • Liteboxer released punch-tracking sensors for go-anywhere workouts.

Looking ahead: As consumers opt for a combination of at-home and IRL workouts, gyms, equipment makers, and content producers are still sorting out the future of fitness.

📰 News & Notes

💰 Money Moves

  • Health club management SaaS company ABC Fitness Solutions acquired Dublin-based competitor Glofox.
  • PepsiCo acquired a minority stake in better-for-you energy drink maker Celsius for $550M.
    More from Fitt Insider: Functional Beverage Boom
  • German bike manufacturer Canyon Bicycles secured €30M ($30.6M) from LeBron James’ LRMR Ventures and SC.Holdings.
  • Sweat Economy, developers of web3 move-to-earn app Sweatcoin, raised $13M in a private token sale.
    More from Fitt Insider: Sweat to Save
  • LA-based Pause Wellness Studios secured $3M in a Series A and struck a franchise deal to expand nationwide.
    More from Fitt Insider: The Wellness Club
  • Gym Class, makers of a VR basketball game for Meta Quest, secured $8M in a seed round led by a16z.
  • Smart mattress maker Bryte raised $20M in a round led by international bed company Tempur Sealy.
    More from Fitt Insider: The Sleep Economy 
  • Salvo Health, a digital clinic for gut health, raised $10.5M in a seed round led by Threshold Ventures.
    More from Fitt Insider: Gut Check
  • De Soi, a nonalcoholic aperitif brand founded by recording artist Katy Perry, pulled in $4M in a seed round led by Willow Growth.
    More from Fitt Insider: Nonalcoholic is the New Cool 
  • Body Rocket, maker of aerodynamic analysis sensors for cyclists, raised over $500K ($612.5K) in crowdfunding.
  • Private equity firm Sentinel Capital Partners acquired Bandon Holdings, the largest franchisee of Anytime Fitness gyms.

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

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