Growfitter Made $1.5 Mn In Gross Revenues By Offering Health And Fitness Services
Mumbai-based health and fitness discovery platform Growfitter has raised $600K in a Pre-Series A round of funding from San Francisco-based VC SQue Capital. With this round, Karan Chellani, Partner SQue Capital will join the Board of the company and Mukesh Makhija, the Managing Partner of Grace Capital Venture, will join Growfitter as an Advisor.
“Our fund is focused on AI, Healthtech, Fintech and online retail sectors. Growfitter is one of the startups in health and fitness domain which is working on core AI and Machine Learning technology and continues to grow with a focus to help build and create a complete ecosystem in the preventive healthcare space. We foresee in the next 3-5 years AI will be the key in every technology startup”, said Karan Chellani Managing Partner SQue Capital.
Growfitter was launched in 2015 by the duo Sanmati Pande and Harshit Sethy. It aims to provide an incentivised wellness program, to build individual health quotient, by motivating and rewarding people to adopt an active and healthier lifestyle.
Sanmati is a qualified Chartered Accountant, CPA (Australia) & MBA in Finance and Harshit has done Masters in Artificial Intelligence and Machine Learning from IIIT Hyderabad.
“Harshit is my nephew and when I shared the idea with him, we thought Finance and AI will be a deadly combination to outrage our peers,” tells Sanmati.
With Growfitter, the duo aims to revolutionise the health and fitness industry in India, in line with their machine learning and artificial intelligence expertise. At, the same time, the startup aims to provide solutions to people which can motivate them to join gyms and fitness centres.
Growfitter claims to have already clocked $1.5 Mn in gross revenue by selling 30K+ fitness memberships through the portal. The health and fitness startup is also witnessing month on month growth by 25%. By 2018, the company also plans to expand into 20 more Indian cities and enter into international markets starting from Canada, Middle East, and Sri Lanka.
The GrowFitter Opportunity: Making Health And Fitness A Fun ‘Activity’
With the Millennials work schedules stretching beyond 8-10 hours and gyms becoming expensive to afford, daily workouts are not a priority for many. This is further complemented by the fact that the rate of fitness penetration in India is just 0.37% and this includes only those having a fitness membership in a gym or a fitness club. Even globally, there are 67% people with gym memberships who never use them.
As per surveys, apart from crowd and money, most people quit gym as they find themselves out of the place with equipment and the regular fitness regime forced on them. Thus, with a mantra – “Going to the Gym is a habit, and habit is what keeps you going on,” Sanmati and Harshit found an opportunity to make health and fitness a ‘fun and rewarding’ activity for the consumers in a two-fold manner.
As an aggregator in the health and fitness domain, the startup provides consumers discounted deals on gym memberships from 8000+ fitness centres across 14 cities, with most maximum users from Mumbai, Bengaluru, Kolkata, Pune, Hyderabad, and Chennai. Growfitters is also an exclusive partner for Talwalkars Better Value Fitness, a listed fitness chain, which is also a minority stakeholder in the company and is currently using solutions in 40 of its gyms. This allows the startup to move pan India with one client, against a majority of other players who are mostly serving localised service providers.
On this, Sanmati explained that Growfitters has also collaborated with insurance companies such as Aditya Birla Health Insurance, wherein based on the consumers’ daily fitness regime, he/she can get incentives on their health insurance premium.
He adds, “In today’s time, we pay a heavy health insurance premium, only with very few incidences in life where we can actually make a claim. On the other side, every claim is a big liability on the insurance companies. This has resulted in losses on both sides. With Growfitters, we offer an individual to maintain a healthy lifestyle by going regularly to the fitness centres and with the improved lifestyle, get a discount on his/her health insurance premium. A win-win on both sides.”
The Growfitter founders have also introduced the concept of ‘morning fitness parties’ to create a strong community of health and fitness lovers. These parties, held at fitness clubs and five-star hotel grounds, not only help the startup in building its brand but also help its partnered fitness centres to directly interact with their potential target audience. And the fun comes along with Yoga, EDM Music, Zumba and loads of other health and fitness activities at one place. “The best part is – the entire event is based on sponsorships, so we have to spend real low on our pockets,” says Sanmati.
Growfitters: Banking On The B2B2C Business Model
According to Pande, majority players in this space are targeting B2C segment. However, with Growfitters, they are also providing corporate solutions. “This helps us in reducing our customer acquisition costs and keep our cash burn intact,” he added.
Further, in comparison to its competitors, the startup is also providing backend POS cloud software to manage day-to-day activities to its partner gyms. This includes tracking attendance, keeping trainers and clients records, sending bulk SMS, etc.
Again, a similar SaaS platform is provided by Book Your Game, which helps its partner gyms to manage leads and members efficiently at one place and with timely automated notifications and updates, and even helps in targeted marketing to prospective customers through the BYG app.
Growfitter has tried to gainsay this competition by adding a payment feature. “The major pain point in the gym is that the owner never sits there and most transactions are in cash, so we have kind of neutralised this. Any kind of payment whether cash, card, cheque etc., happens through our portal, and helps the owner get the segregated real time status of the transactions in the gym. We have already implemented this in the various branches of Talwalkars and are now in talks with the insurance companies for the same.”
Growfitter has already partnered with Aditya Birla Health Insurance and has powered the Health & Wellness portal of ABHIL.
“The role we see for ourselves is one of a much-needed catalyst to expand the prevalent health insurance landscape in India by focusing on the ‘health’ in ‘health insurance’ and reward the healthy behaviour by incentivising the efforts,” said Mayank Bathwal, CEO, Aditya Birla Health Insurance Co. Limited.
The startup is also making money from its SaaS platform as well as on the commissions which it gets from selling gym memberships, with margins close to 7%-10%.
The startup will deploy the raised funds towards enhancing its technology infrastructure. As stated by Harshit, “The biggest problem in India is people want to be fit but they do not know how to start and where to start. With the help of machine learning techniques, we are trying to make a fitness recommendation system which will help fitness lovers to comprehend the process and achieve their fitness goal effectively. At the same time, this will also help the consumers and fitness centres to keep track of fitness history, even if the gyms got switched. This kind of data has not been available to date in India.”
Health And Fitness Domain: Challenges And Plans Ahead
In words of Sanmati, the toughest task for them in the initial phase was to understand the entire value chain working in the health and fitness space. Space is largely fragmented and there is a lack of infrastructure, and discounting seems to be a marketing strategy that still rules here.
However, during their journey, they realised that pricing is not the ultimate key to customer retention. One needs to move towards personalisation, getting an in-depth body metric analysis for the consumers, in order to provide them with a customised fitness regime.
“Health and Fitness industry is unorganized sector and Growfitters is trying to create a strong economic model for both service providers and customers. The good thing about them is that they have tried to understand the complete ecosystem of the industry by meeting fitness owners, trainers, and consumers,” said Prashant Talwalkar, Promoter & CEO Talwalkars Better Value Fitness Limited.