Issue No. 213: Year-End Review

Heading into the final weeks of 2022, today, we’re reflecting on the industry-defining shifts impacting fitness and wellness.

The goal? Recap what we learned this year and create a cheat sheet of consumer behaviors, business strategies, and emerging opportunities for 2023.

IRL Resurgence

Fitness seekers are returning to gyms and studios, but the recovery isn’t evenly distributed. While some operators and modalities surge, others have stumbled.

Trending up: HIIT, mindful movement (stretching, Pilates), and strength/sculpt classes
Slow going: Indoor cycling, yoga, dance, and CrossFit bookings trail other genres

Across the board, motivation (81%), instructors (74%), and accountability (61%) are bringing members back, per Mindbody. Taking notice, gyms/studios will excel by providing the real-time feedback, unique programming, and community vibes you simply can’t get at home.

Disconnected Fitness

As digital/connected fitness cools, brands are rethinking everything.

After raising billions in recent years, key players cut costs and jobs, with layoffs hitting Peloton, Tonal, Hydrow, iFIT, Zwift, Tempo, Beachbody, and others.

Hoping to correct course, companies are testing new tactics:

Trading DTC sales for mass distribution with retailers and Amazon
Prioritizing subscription revenue over hardware sales with rental programs
Offering smaller, more affordable products to supplement hybrid workouts

Still taking shape, creating a more open, fitness-as-a-service ecosystem could move the category from siloed content to integrated bundles.

Holistic Health

A powerful megatrend, the proliferation of wellness seemingly knows no bounds.

Already on pace to reach $7T by 2025, the sector will rise even higher as the definition of wellness evolves.

Typically viewed in isolation, consumers and companies are realizing that physical, mental, and emotional health are all intertwined. Accordingly, brands are entering new categories as consumers spend even more on holistic products and services.

More interesting, and potentially more impactful, consumer wellness is infiltrating healthcare, advancing preventative measures for chronic lifestyle diseases.

Active Nutrition

Healthy doesn’t cut it. Consumers want foods with wellness-boosting benefits.

Serving up more energy, better sleep, and improved immunity, functional food and bev boomed. Likewise, supplement makers cashed in — especially all-in-one products like Athletic Greens ($1.2B valuation) and Huel ($560M valuation).

A step further, tapping labs, wearables, and even DNA sequencing, personalized nutrition is becoming a reality.

Meanwhile, with 75% of consumers saying food is the best medicine, companies prescribing healthy meals can play a massive role in curbing our addiction to processed snacks.

Beyond Biohacking

Quantified self is becoming the status quo.

But, as this trend moves further into the mainstream, monitoring every aspect of well-being will be easy, affordable, and increasingly actionable.

Going from novelty to necessity, DIY diagnostics and 24/7 tracking are pushing deeper into healthcare but haven’t fully broken through.

Elsewhere, wellness studios and social clubs are already normalizing protocols like ice baths and IV drips. The next level of optimization, telehealth for hormone, psychedelic, and longevity therapies will become commonplace.

Looking ahead: We covered a lot of ground this year, so it’s almost impossible to pack every insight into a single newsletter.

If we missed anything you think is especially noteworthy, send me your takeaways from 2022 by replying to this email.

And, if you’re working on a health/fitness startup, you can always reach out — we invest in mission-driven founders at the earliest stages.

🦾 Fitbod’s CEO on using tech to democratize personal training

Artificial intelligence is transforming fitness for trainers and exercise seekers.

On the Fitt Insider Podcast: Fitbod co-founder & CEO Allen Chen discusses his company’s AI-powered personal training platform.

We also cover: scaling to 300K+ subscribers, gamifying strength training, and making personal trainers more effective.

Listen to today’s episode here

💸 Keurig Dr Pepper sinks $863M into energy drink maker Nutrabolt

Buying a 30% stake in the company behind C4 and XTEND, the beverage giant is banking on the continued rise of the $175B market for “clean energy” drinks.

Room to grow. Backed by Kevin Hart and on pace to earn $650M next year, Nutrabolt taps demand for energy-boosting elixirs and fitness supplements.

As consumers opt for low-/no-sugar beverages with functional benefits, Big Soda is spending big bucks to stay relevant:

Last year, Coca-Cola paid $5.8B for sports drink maker BODYARMOR.
In August, PepsiCo bought a $550M stake in Celsius. It acquired Rockstar for $3.8B in 2020.
KDP previously acquired CORE Hydration ($525M) and Bai ($1.7B). Last month, it invested in nonalcoholic beer brand Athletic Brewing.

Bubbling up. Better-for-you beverage startups are gaining traction by zeroing in on specific wellness benefits: Prebiotic soda brand Poppi just raised $25M, OLIPOP added $30M this year, and THC-infused drink Cann landed $27M in February.

Punchline: Pouncing on emerging trends, upstarts are validating new verticals. But where consumer spending leads, incumbent brands will follow, proving to be fierce competitors, potential partners, and likely acquirers.

🚀 Arketa lands $7.6M to grow fitness studios beyond classes

A platform enabling hybrid fitness experiences, the company added new funding from First Round Capital, Amity Ventures, Fitt Capital, Y Combinator, and others.

All-in-one. In addition to managing class bookings and payment processing, Arketa supports live-streamed classes, video libraries, multi-day experiences like retreats and teacher trainings, and branded retail.

As Arketa co-founder and CEO Rachel Lea Fishman put it:

“We’re unlocking new monetization streams in this hybrid world, helping studios earn more than they were through in-person classes alone.”

Hybrid revenue. The pandemic accelerated the shift to hybrid workout routines.

Unable to find an end-to-end platform for business management, studios were forced to cobble together fragmented short-term solutions.

Seizing the opportunity, Arketa is building the omnichannel infrastructure for the future of fitness, helping studios and creators increase digital and in person revenue.

Looking ahead: As gym traffic rebounds, booking and club management platforms for both spa services and boutique fitness are scaling up. But, with exercise preference trending toward a 50–50 split between the gym and home, filling classes is only half the battle.

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📰 News & Notes

Strength training is America’s top workout.
Nix launches noninvasive hydration-tracking patch.
Strava’s Year in Sport reveals the power of community.
Rockefeller Foundation awards food-as-medicine grants.
GoQii introduces gamified anti-aging experience in the metaverse.
Fitt Jobs: Hundreds of open roles with the industry’s top companies.
Startup Q&A: Xponential’s Danyal Ali on its multi-studio fitness passport.
Gympass adds CorePower, 24 Hour Fitness, Thrive Global for employee wellness.
Fitness certification provider ISSA acquired Functional Aging Institute [Reread: The Everything Coach]

💰 Money Moves

Fitt Insider acquired WellToDo, a UK-based media platform for global fitness and wellness news.
Will Perform, an athletic recovery and pain relief company co-founded by Serena Williams, raised $8M in a funding round led by Base Ventures.
Prebiotic soda maker Poppi pulled in $25M in a funding round led by CAVU Venture Partners.
More from Fitt Insider: Functional Beverage Boom
Keurig Dr Pepper acquired a minority stake in Nutrabolt, maker of functional nutrition and energy drinks, for $863M.
More from Fitt Insider: Liquid Gold
Juno Medical, a tech-enabled primary care clinic for underserved communities, added $12M in a Series A co-led by NEXT VENTŪRES and Serena Ventures.
Enthea, a startup offering corporate benefits plans for psychedelic therapy, raised $2M in a seed round led by Tabula Rasa Ventures.
Smart ring maker RingConn raised over $600K in crowdfunding.
More from Fitt Insider: Smart Ring Wars
Sonde Health, a platform using vocal biomarkers to detect respiratory and mental illness, raised $19.25M in a Series B round led by Partners Investment.
At-home fertility testing platform Turtle Health secured $5.4M in a seed round.
MALK Organics, makers of plant-based milk products, landed $9M in a Series B round co-led by Benvolio Group and Rotor Capital.
Pebble, provider of customized healthcare benefits packages for employers, closed $17.2M in a seed round.
Off the Grid, makers of a stationary bike that generates electricity, secured $900K in a pre-seed round.
Campervan company Cabana raised $3M in a funding round led by TechNexus Venture Collaborative.
More from Fitt Insider: Camping x Tech
Alfalfa, a healthy fast-casual restaurant, raised $2M in a seed round led by Blue Falcon Capital.
Sustainable performance apparel brand Zenkai Sports closed $1M in a funding round.
Black Sheep Foods, a foodtech firm making alt-meat products, secured $12.3M in a Series A round led by Unovis.
Noninvasive cardiac health monitoring startup Cardiosense pulled in $15M in a Series A.
Mexico-based women’s health clinic Plenna secured $4.4M in seed funding.
BehaVR and OxfordVR, makers of VR therapeutics for mental health conditions, merged and raised $13M in a Series B round.
Chile-based alt-meat producer NotCo raised $70M in a Series D extension round led by Princeville Capital.
Plannly, an AI-powered employee well-being platform, raised $1.2M in a funding round.

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