EGYM, the connected fitness startup named after the founder hit a wall at the gym, has raised $200m at a $1.2B+ valuation

Being healthy is big business these days. Now a startup that has come up with a unique way to leverage technology to help people with their exercise regimes is announcing major funding, putting weight behind its push for growth.

Munich-based EGYM – a maker of connected fitness equipment and personalized fitness technology that is reshaping the fitness market among gyms and corporate wellness programs – has closed a Series G round of just over $200 million for L Catterton and Meritech, both new backers . the first.

The funding comes in at a post-money valuation of more than $1.2 billion, CEO and founder Philipp Roesch-Schlanderer confirmed to TechCrunch in an interview, and will be used in several key areas. The company wants to drive more business in its new markets, the UK and the US, where it has acquired two smaller companies, Hussle and FitReserve. It also wants to continue building the AI-based assistant, called Genius, which it launched earlier this year. Despite the hype surrounding AI, Genius is not an AI gimmick, Roesch-Schlanderer said.

“I don’t have an opinion on the wider world of AI, but what I can tell you is that, in our field, it adds enormous value to making sure that people always have the best exercises at their fingertips based on past success, their behavior, their intentions.” Only about 10% of gym-goers have access to personal trainers, making an AI trainer a viable alternative, he added.

Roesch-Schlanderer founded EGYM after becoming frustrated with gyms and exercise.

About 200 million people around the world stay in shape by exercising in gyms. Roesch-Schlanderer also wanted to be in good shape, but found himself in trouble. If you haven’t been to the gym and exercised regularly, you may not know where to start. And even people who walk regularly don’t have much data about what they could be doing better or differently to avoid injury.

With those gaps in mind, EGYM has built a series of connected fitness stations that help track what users are doing, relying on apps to help them track their activity both on EGYM machines and, using data from wearables, wherever they sweat. . Initially, EGYM contracted with gyms to sell the equipment, and later with companies that developed corporate health programs to have their employees use the equipment. The whole model is based on B2B2C: no consumer-specific programs are in the works.

The formula was a huge success. Roesch-Schlanderer said the company is profitable on an EBITDA basis, and expects to generate $500 million in revenue by 2025.

The company today says that the company’s network operation, Wellpass, has 17,000 sports partners (ie, gyms), 14,000 corporate customers, and 3 million “eligible” employees. (As a point of comparison, when EGYM last raised funding — $225 million in July 2023 — it had 2.5 million users on Wellpass.) In all, about 18,000 fitness and health centers use EGYM equipment and services, serving about 6 million people. who use EGYM Products every month. Now about 75% of the business is subscription-based, with the remaining 25% focused on its operations, he said. “The subscription market is bigger than the gym technology, but the gym technology is what creates the value,” said Roesch-Schlanderer.

Roesch-Schlanderer taps into a growing trend. The world is slowly getting closer to the concept of health protection, looking for better ways to identify what might go wrong and what you should do to avoid it, before it’s too late and your options are reduced to medication, surgery, and expensive doctor visits.

Companies like Neko Health – a start-up co-founded by Daniel Ek – are building clinics that examine the bodies of customers and combine that with AI algorithms to provide multiple types of diagnoses about the health status of users to better manage the state. of their life. Others are exploring what role the microbiome might play in our health regimes. Eligibility builds to be a key part of that proposition.

Nevertheless, the size of the investment is noteworthy as we still see a lack of growth cycle in Europe, especially for companies not focused on AI.

The AI ​​game at EGYM, which was introduced earlier this year, is still fresh and in progress. Asked what models it uses, the company told me, “EGYM Genius is based on a set of machine learning models designed for specific problems in the ‘exercise’ domain. So Genius is not based on any Big Language Models, but rather on a set of models specially designed and trained based on many years of training data collected by EGYM. This allows us to combine the power of deep learning models with the advantages of other machine learning methods that offer more interpretability than LLMs.”

Roesch-Schlanderer said he was close to another round shortly after the previous one was announced.

“We had enough money to survive another Covid,” he told TechCrunch. Covid-19, and being able to survive something like it, loom large in his mind, because the company almost collapsed during the pandemic.

However, because he was getting a lot of interest income, he decided to use this time to find what he described as “dream investors.” Taking a cue from the Jeff Bezos school of fundraising, he said, “I decided to bring together the right investors with my work.” That goal: doubling down on growth, with a little risk thrown in for its AI gameplay.

Paul Madera, founder and partner at Meritech, and Marc Magliacano, managing partner at L Catterton, both joined the board in this round.