VC and Health, Fitness, and Wellness startups; sector analysis
4 min readDec 11, 2020
I wrote this on June 15, 2020 back when I was interning for a micro-VC for the summer. It was part of the Industry Research/Analysis I was doing on the HFW sector. Below were my findings/predictions.
Main Ideas:
- COVID-19’s affect on this sector
— Workout from home fitness, garage gym, and wearables markets boom as quarantine forced the nation into lockdown
— Brick and mortar gyms decline severely, may see permanent shift from this business structure in the age of post-COVID
- Government has intrinsic incentive to keep their citizens healthy, some countries are taking steps to better incorporate fitness into city plans
- Instagram fitness, GymShark/Rogue brand ambassadors takeoff and help boost national following and revenue
With COVID-19 shutting down all gyms across the country for months, the workout from home (WOFH) and wearable industry exploded.
- Apple is looking to capitalize on this new age of fitness by introducing a new, one-stop fitness app that will link to the Apple Watch. Set to announce it in June, it may even include free programming. Platform integration is clear a path to subscription revenue (as evidenced by Apple Music, Apple News+, and Apple Arcade). They could offer a free year of Apple Fit if you buy an Apple Watch which could significantly boost their wearable market.
- Now that big tech companies like Apple are getting involved in the personalized, stay-at-home fitness arena, it seems like this may cause the end of brick and mortar gyms.
(https://insider.fitt.co/apple-fit-personalized-health-fitness/)
- Fitness and sleep tracking wearables like WHOOP, Oura Ring, and Apple Watch are proving useful in the early detection of coronavirus. Monitor changes in respiratory rate and the body’s response to the virus (sleep, breathing, etc.).
COVID-19’s cascading impact on brick and mortar gyms.
- 24 hour fitness just claimed bankruptcy and closed 130 locations
- 50% of US gym-goers said they won’t return upon reopening. People are still scared of the virus.
(https://runrepeat.com/gyms-reopening-coronavirus)
- Social distancing will force gyms to limit capacity, trainers could realize that they don’t need a physical gym to build a following and can program at home workouts and market them online (Instagram, Facebook) — all this accumulates to boost the stay at home, digital fitness experience
- Demand for garage gym fitness equipment skyrockets — Rogue Fitness, who sponsors the CrossFit Games, USA Weightlifting, and the Arnold Classic, were back ordered on pull-up bars, kettlebells and squat racks for months. People used quarantine to justify pulling the trigger on extravagant garage gym investments they had long been mulling over.
Government’s involvement and interest in the health of its citizens.
- Outdoor cycling has taken off since COVID-19. Governments are starting to implement new initiatives to boost the health of its citizens. Mind you, governments are incentivized for their citizens to be healthy — estimated $100B increase in world GDP if nation’s are healthier.
- UK’s $2.5B plan to put walking and cycling “at the heart” of the country’s transportation system. We saw Central Park be born in response to the cholera epidemic of the 1800s, so it wouldn’t be unordinary for history to repeat itself due to COVID-19.
(https://insider.fitt.co/free-outdoor-fitness-public-parks/)
Fitness commerce — As the fitness industry shifts to online, athleisure companies must increase their social media exposure.
- Top brands like Lululemon and Gymshark use brand ambassadors and social media influencers to market their products and draw in more followers. Gymshark specifically partners with good looking, very fit, Instagram famous individuals like Steve Cook, David Laid, and Nikki Blackletter to promote their clothing line. These “Gymshark athletes”, some of them powerlifters, crossfitters, or attractive fit girls will often post their workouts on their Instagram, essentially programming and drawing in even more of a fanbase.
(https://insider.fitt.co/the-new-athleisure-playbook)
- Rogue Fitness does the same thing but with predominantly CrossFitters, World Strongest Men, and Olympic Weightlifters. It all depends on their targeted audience. This type of marketing will be vital for the Health, Fitness, and Wellness sector players going forward.
