How did it all start?
The founders – Mukesh Bansal and Ankit Nagori left Flipkart and joined hands to disrupt the health and fitness using their expertise in building products backed by technology. The health and wellness sector in India, although growing at a brisk pace was largely unorganized. The duo had a keen interest in fitness and an aim to build a “consumer-facing brand”. Together they discovered the potential in the health sector not capitalized by anyone before and created Cure.Fit!
The Growth Story
Mukesh Bansal, co-founder of Myntra is an experienced founder, acquiring funding for Cure.Fit was hence easier since some of the investors from Myntra stayed with Cure.Fit. They raised funding from investors such as Kalaari Capitals, Accel partners etc in initial rounds of funding. Cure.fit has raised a total of $404.6 million over 9 rounds of funding. Their latest funding was raised on March 23, 2020, through a Series D round led by Singapore-based investment firm Temasek.
The company ventured out by buying Cult, which was a niche fitness brand based out of Bengaluru with just three centres. Now, Cult.Fit has a presence in 130+ locations across Bangalore, Delhi, Mumbai, Hyderabad and Dubai.
With further acquisitions of companies like Tribe Fitness, Kristy’s Kitchen, 1000 Yoga, the startup kept expanding. A major boost happened with the acquisition of Fitness First, the second-largest fitness chain in India that Cure.Fit made a solid space for itself in the fitness industry.
What is their business model?
Cure.Fit’s business model is centred around creating a connected world where customers can move through an entire ecosystem required for a healthy lifestyle including working out, healthy eating and mental health — all available at one place. The whole ecosystem runs through its Cure.Fit app.
The startup now has expanded to six products under its platform:
- Cult.Fit, a chain of premium fitness centres
- Eat.Fit, an online health food delivery service
- Mind.Fit, a provider of online-offline mental health and wellness services such as meditation and yoga
- Care.Fit, which provides online-offline services in primary healthcare
- Whole.Fit, which delivers groceries engaging in 20 food categories
- Cult.Sport, through which it sells athletic clothing, shoes and accessories
Cure.Fit says it is targeting the $100Bn Health market which is indeed large. The aim to create an ecosystem for health care services gives us an insight into what Cure.Fit is Cure.Fit is not a company providing disparate services, it is a healthcare data company. After all, data is the new oil. All of this marketing in acquiring customers is an attempt to get valuable customer healthcare data. Similar to how Facebook and Google manage to sell you better products using data, Cure.fit will be able to sell you healthcare services.
In an interview with Economic Time, Mukesh Bansal mentioned that there was significant cross-category purchase, going up to 40% in well-penetrated markets. He added that once there was significant market penetration in most cities, they will be able to launch overarching subscriptions and digital tools to track fitness goals.
The methodology followed at Cult.Fit
The reason why Cult.Fit was different from any other fitness centre, is because of their enrollment strategy. Cult.Fit changed the normal routine of enrolment in a gym and routed it through the app. They offered two free trial classes from an array of wide selection – Dance, Zumba, HRX Workout and the likes after which a suitable subscription could be bought via the app saving a lot of time.
The fitness regime that it advocates is sans electronic equipment and to avoid overcrowding, one has to pre-book a class at his desired timing and if the classes are full, he can make use of the “Waitlist and Dropouts” system wherein he could join the waitlist and will get an invitation once someone drops out.
To reduce the guilt of missing workouts due to a busy schedule, the team at Cure.Fit introduced “Unlimited 30 days pause” where the member could pause his subscription several times till he exhausted 30 days and just had to set a to and from date via the app. The data revealed that this increased the probability of the user coming back after the break.
The team at Cure.Fit believes that fitness depends a lot on regularity. To inculcate this habit and encourage the users, they introduced the “Fitness Challenge”, wherein if a user attends at least one class a week for four weeks in a row, they are awarded a free class. This led to increased engagement by users who hadn’t attended a session in weeks.
What did the users have to say?
While the users who renewed their subscription loved Cult.Fit, but out of the ones who didn’t 90% said that they would recommend Cult classes to other individuals. The survey conducted by Cure.Fit further revealed that 60% of their users wanted to renew their subscription and only less than 10% did not find Cult classes to be the right fit to their requirement.
The Marketing Strategy
We all admire Hritik Roshan’s fitness, don’t we? And Tiger Shroff’s dance moves?
The team created workouts inspired by the actors – HRX Workout by Hritik Roshan, Prowl by Tiger Shroff and running skills by Milind Soman.
They have also partnered with companies like CRED, Grofers and offered free classes for a month to promote their brand.
With the coronavirus affecting all businesses, Cure.Fit started operating virtually, they hosted celebrity workouts called ‘Masterclass’ with Kriti Sanon, Mouni Roy, Remo D’Souza and fitness experts like Yasmeen Karachiwala which garnered a lot of traction.
To top this off, they have also enhanced their Eat.Fit section where chefs like Ranveer Brar share healthy recipes with the viewers.
Let’s Talk Numbers
After we have looked at the operational strategy of the company, let’s have a look at its financials.Cure.Fit has had a steady inflow of capital since the beginning.
The company saw a 7.3 times increase in revenue compared to FY18 while it spent heavily on infrastructure which explains the loss for the financial year.
Fitness accounted for the largest revenue share followed by healthcare. The expenditure of the company was spread across rents, employee benefits, commission and advertising.
According to an article by Entrackr, the tech start-up should essentially be valued as a real estate venture which uses technology. They base it on the fact that cult centres for Cure.Fit accounts for a heavy capital expenditure in terms of leasing the space and branding it. Although the company breaks even on an operational level, it has not reached its peak capacity in terms of its subscribers.
However, due to the ecosystem that it has built, the cost of acquiring users through Cult.Fit pays off in the long run because the subscriber ends up using their other verticals. This cross-section among the 6 verticals spreads the heavy cost that it incurs in terms of rent and takes off the burden.
Fighting Covid-19
With all the fitness centres shut, the company was swift enough to move to a digital model. We can’t relate fitness to online classes but Cure.Fit made us believe that we can attain our fitness goals even at home.
After offering free recorded sessions for a prolonged period during the lockdown, the company monetised this by offering varied subscriptions – Live Classes which have pre-recorded sessions, Personal Training and Online Group Classes. The Cure.fit home workout app uses AI to bring more effectiveness to users’ physical training. The app has unique features such as the energy meter and gamification which makes the live classes more interactive and engages the user during the workout.
Besides, they also onboarded several specialised doctors for virtual consultations and nutritionists to tackle any lifestyle issues. They also facilitated mental well being by offering therapy sessions.
The coronavirus pandemic has accelerated the company’s growth. While earlier, the company would primarily offer its classes at physical locations, the Covid-19 induced lockdown meant that it had to go digital. As a result, the company claims that its user base has expanded to 15 lakh users from 2.5 lakh. Although the revenue has taken a hit due to COVID, there has been a significant overall increase in traffic and engagement on the digital platform.
But not everything is rosy, with offices shut and most people working from their homes these days, the food delivery segment has seen a fall of 35-40% as compared to Pre-COVID levels. Due to this, the startup had to layoff 1600 employees and had to cut-down operations of Eat.Fit from 15 to 3 cities.
The Road Ahead
An important goal for the startup has been to expand to international markets. Last month it launched some of its services including its fitness service Cult.fit and Mind.fit in the United States, its first market outside of India. The startup’s app which is available on iOS and Android was downloaded more than 12,000 times in the U.S. last month. The startup is currently offering its services in the U.S. at no charge to attract users, but it will soon introduce a subscription plan.
Given how the coronavirus pandemic has boosted the online services provided by Cure.Fit , in a recent interview with CNBC, co-founder Mukesh Bansal mentioned that Cure.Fit will now be primarily a digital-first company. The DNA of the company is now more digital-focused and will aim to offer all its service in that format.
Cure.Fit has a lofty vision accompanied with high risks. Will Cure.Fit be able to revolutionise fitness or will it end up burning out.
A Special Mention to Pooja Kunden and Pratik Jain Thank you for your contribution!
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