Munich In Corona times, many gyms are having a hard time: The rules keep changing, and many athletes let their contract rest or even resign. Many operators are reluctant to invest.
For the newly started Egym, which has online-activated, fully automatic strength machines in its range, these are actually not good conditions. “I’ve never had as much permanent adrenaline in my body as I’ve had in the last year and a half,” says Egym’s CEO and co-founder Philipp Roesch-Schlanderer.
But the business model has proven to be extremely robust. Although the customers’ business worldwide was completely quiet for a long time, Egym was able to keep its turnover stable during the past year. And for 2021, Roesch-Schlanderer announces: “We are back on a growth course.” For the fourth quarter, the company expects sales growth of 50 percent.
Egym has also reached break-even for the first time. The new fitness center, where study visitors can be measured and, for example, the progress of their mobility training, is sold out the rest of the year, as is part of the fitness equipment.
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Now investors are also sending a signal that they continue to believe in history: Mayfair Equity Partners is investing $ 41 million in a Series E funding round. In total, investors have invested about $ 150 million in the company.
Roesch-Schlanderer’s optimism is high: Many operators invested in digitization after the shutdown ended. Because only with innovative offers could they keep up with outdoor fitness and home training, which many athletes trusted during the closures.
People could also burn calories at home. Studies would have to offer real added value. “Studies show that three-quarters of systems have recognized this and want to invest in digitization,” says Roesch-Schlanderer.
Restructuring in the first lockdown
As a result, the new market is so large that it also offers great potential in the Corona weakness phase. However, the fitness industry as a whole has been hit hard. Again and again, the studios had to close or limit the number of visitors. According to the Employers’ Association for German Fitness and Health Facilities (DSSV), the number of customers in the industry who have been spoiled successfully fell from 11.7 to 9.8 million last year – if you deduct the closed contracts at the same time. Sales collapsed from 5.5 to 4.2 billion euros.
The decline continued in the first half of 2021. Given the new 2G and 3G rules and the fact that those who have not been vaccinated must be tested at their own expense from mid-October, the association fears that the numbers will fall again by up to a third. “As a result, particularly socially disadvantaged members of the population must give up the use of fitness and health services,” reads a current call for help.
With the programmable devices, Egym was on a growth course for years. If a customer logs in, the machines automatically adapt to him. Using an app, clients and educators can make training plans and document progress. The data can be uploaded to the cloud and analyzed there. Egym has also set up a company fitness network, among other things. Most recently, 13,000 studios used Egym products and services.
The start-up from Munich, which had grown rapidly for years, then had to go through its first restructuring in the first shutdown: 100 of the 450 employees had to leave. Sales stagnated last year at around 82 million euros instead of growing to the three-digit area as planned.
Roesch-Schlanderer tried to make the most of the situation. Egym developed a health-focused “immunity boost program” that allowed gyms to focus on boosting the immune system rather than just aesthetics. In addition, the Egym programs could also be used to plan the booking of the studies according to hygiene rules, and the distances could also be checked with it.
Investors have been loyal to Egym. At the beginning of the year, the company raised 28 million euros. The leading investor was NGP Capital, and the existing shareholders Highland Europe, HPE Growth Capital and Bayern Kapital also participated.
Now Mayfair Equity Partners also got involved. “The $ 97 billion health and fitness market is an extremely robust and growing global sector,” said partner founder Kunal Dasgupta. Egym is a “pioneer in the digitization of this ecosystem”. It wants to help expand its business in the United States and expand its customer network.
Roesch-Schlanderer not only used the lockdown period to expand the business model. Without the usual business trips, he also managed to play more sports – and lost 20 kilos.
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