The Mukesh Bansal and Ankit Nagori-led Cure.Fit has acquired Fitness First in India. With this deal, Cure.Fit has also merged its subsidiary, Cult Fitness, with the Fitness First business in India. The joint entity will now operate under the Cure.Fit platform.
As part of the transaction, Fitness First will become a wholly owned subsidiary of Cult.Fit and Fitness First’s majority stakeholder, Oaktree, will get a minority shareholding in Cult.Fit. Oaktree will also invest additional capital in Cult.Fit in the near term. The transaction is expected to be completed in the next few weeks.
“This partnership will put Cult on track to become the largest fitness service provider in the country by end of this year,” said Cure.fit co-founder Ankit Nagori.
Oaktree senior vice-president Federico Alvarez-Demalde believes that Cult has a future-ready business, solid management, quality sponsors, and the ability to bring better fitness and health services to a large number of Indians.
Induslaw Delhi and Bengaluru was the legal advisor to the transaction. Maple Capital Advisors was the sole financial advisor to Oaktree (funds managed by Oaktree Capital Management, L.P.) on this transaction.
Pankaj Karna, founder and managing director, Maple Capital Advisors, said, “We see a massive headroom across the consumer spectrum in the emerging sports, wellness, and fitness sector. This marquee consolidation was unique to both partners from a business synergy, value, transaction structure, and future potential perspective. We hope that the newly merged entity will be able to unlock true growth potential of this fast emerging sector.”
The Synergy Between Fitness First And Cult
Cure.Fit founder Mukesh Bansal said, “We are excited about the merger of Cult and Fitness First businesses in India. We see significant synergies in our business models and the combined entity will offer a compelling health and fitness offering to customers across the cities. Fitness First customers will get additional access to all Cult centres and will get superior experience through the Cure.Fit platform which enables holistic health & well being.”
The consolidated business will have more than 50 fitness centres across the country, to begin with and claimed it will add five fitness centres every month. The Cure.fit platform now has a presence in Bengaluru, NCR, and Mumbai, and has over 40,000 members.
Fitness First India is one of the country’s leading premium fitness chains with 10 fitness centres in the NCR and Mumbai. The fitness centres are full-service centres and employ expert trainers as well as personal trainers along with a mix of machine-based and group exercises.
Cult, on the other hand, was acquired by Cure.Fit in August 2016 for $3 Mn. It was founded in 2015 by Rishabh Telang and Deepak Poduval. Cult offers a mix of martial arts, yoga, strength and conditioning, and outdoor activities. Cult gyms don’t have treadmills or all-in-one fitness machines. They are open floors with a boxing ring, jump ropes, boxing bags, tyres/hammer, speed chutes, resistance bands, free weights, and plyometric boxes.
As of now, Cult leverages technology and data to provide holistic health and well-being services to its customers with the help of Cure.Fit platform. It has over 40 fitness centres, primarily based on functional workouts and group exercises. The business is full stack and offers both digital (DIY content on App) and offline fulfilment.
In a recent interaction with Inc42, Pankaj further added, “This consolidation will create one of the best platforms in the industry, offering good value proposition with premium brands at one place and covering rare spectrum of customers. Not only Cult will get new markets to grow and get a better positioning, i think it makes sense for the shareholders to be a part of this fast-growing spectrum.”
Cure.Fit: Diving Deep Into The To-Be $90 Bn Indian Fitness Industry
Founded in 2016, Cure.Fit has adopted an acquisition-led strategy to further its growth and scale faster. Cure.Fit is backed by marquee investors such as Accel Partners, IDG, Kalaari, Ratan Tata, and UC RNT.
Apart from CULT, Cure.Fit has acquired startups like Tribe Fitness, Seraniti, Kristys Kitchen and a1000yoga. In August 2017, Cure.Fit also signed on Hrithik Roshan as its brand ambassador. The five-year contract is valued at $15.6 Mn (INR 100 Cr).
With its vision to make holistic health and well-being easily accessible to people, the Cure.Fit platform intelligently integrates physical fitness (Cult.fit), mental fitness (Mind.fit), healthy food (Eat.fit), and to-be-launched primary care (Care.fit), all on one app.
The sports, fitness, and wellness industry in India is poised to be a $90 Bn industry by 2022, up from $35 Bn in 2016, growing with a CAGR of 17%. The driving factors for this growth include demand levers like affluence, sedentary lifestyle, and increasing awareness about health and fitness, backed by robust supply drivers.
However, the opportunity is still ripe and space is far from saturation. Around 120 startups in this sector collectively raised only $21.2 Mn in funding during FY17. Among major players are startups such as Stratfit, Growfitter, Fitnapp, and HealthifyMe.
In such a scenario, consolidation is a good strategy, and so is adopting a holistic approach to blend all kinds of fitness services on one platform, providing both online and offline options to the price-sensitive Indian user.