Munich The corona pandemic plunged the growth-spoiled fitness industry into a deep crisis. “When the studios were closed for so long, we feared for our existence,” says Egym founder Philipp Roesch-Schlanderer. The start-up had to cut jobs for the first time, but persevered. The provider of digitally networked devices and company fitness is now benefiting disproportionately from the recovery in the industry.
The new US investor Affinity Partners, founded by Donald Trump’s son-in-law Jared Kushner, is investing up to 207 million euros in the Munich-based company. According to industry circles, this is now valued at around 600 million euros.
“I promised the employees during the pandemic that I would turn the company into a financial fortress,” says Roesch-Schlanderer. Well financed, one can now go on an aggressive growth course. Operationally, Egym should be in the black for the first time this year.
Fitness has long been a stable growth market. From 2019 to 2021, according to the industry association DSSV, the studios’ revenues collapsed from 5.5 to 2.2 billion euros in the pandemic. It was probably just a short-term slump. Last year it was again 4.9 billion euros in sales, the number of members in Germany increased from 9.3 to 10.3 million.
For this year, two-thirds of the companies expect sales to continue to rise. The fitness and health industry has not yet fully recovered from the effects of the pandemic, said DSSV chairman Thomas Wessinghage. But one is confident that this year more people will “take advantage of the health-promoting offer”.
Egym was at least able to keep sales stable during the 2020 and 2021 crisis. In the first corona lockdown, the company quickly reduced costs. 100 of the then 450 employees had to go. That was a painful experience, says Roesch-Schlanderer. “But it’s good for the company culture to have gotten through something like this once.” Egym has come through the slump better than its competitors, which is why it is now growing faster.
For this year, two-thirds of the gym operators expect sales to continue to rise.
(Photo: Egym)
Carsten Rudolph, Managing Director of the Bay-Start-up investor network, has known Egym since the founders took part in the Munich Business Plan as a student team in 2010. Egym has “adapted its business model to the needs of the market with a consistent focus on growth,” he says. The Coronadelle was then used for further strategic development.
The company started with programmable fitness equipment. If a customer logs in, the machines automatically adapt to him. With the help of an app, customers and trainers can create exercise plans and document progress. The data is uploaded to the cloud and analyzed there.
The majority of sales – according to industry estimates they rose by 70 percent to around 130 million euros last year – are now generated by the company with company fitness. The offer is called “Wellpass”. The segment was further expanded last year with the takeover of French corporate fitness competitor Gymlib. The aim is to become the European market leader in this segment. “What works in two countries also works elsewhere,” Roesch-Schlanderer is convinced.
The fitness offer should pay off for the companies
Egym concludes framework agreements with companies. The employees pay a little extra and then have free entry to thousands of studios in Germany. The cooperation is interesting for them, because the company access mainly attracts customers who have not yet visited a studio.
Egym Wellpass customers include Allianz and the start-up Personio. So far, 7500 employers with 2.5 million employees are under contract. In some companies, two thirds of the employees use the offer, on average it should be about 15 percent. Competitors include the Urban Sports Club and Hansefit.
Roesch-Schlanderer is convinced that the segment will continue to grow. In the battle for the brightest minds, companies have to work on their attractiveness as employers. The financial support of a visit to the fitness studio is one of the few benefits that have an immediate “return on investment”: “If the employees are healthy, it pays off directly.”
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Through the corporate fitness network, Egym also has access to thousands of fitness studios. If they buy the devices from Munich, they can be connected to the Egym app. After the studio visit, the employees can then, for example, view a digital evaluation of their training.
The company was at least able to convince the new financial investor of the business model. “It’s not often we see hundreds of millions of companies nearly doubling in size year over year,” said Affinity Partners’ Asad Naqvi. Egym addresses “the massive and fast-growing global fitness and health market with a differentiated, technology-centric approach.”
Affinity Partners is initially investing EUR 107 million in the company, with a further EUR 100 million available for investments if required. Roesch-Schlanderer is also looking around for possible further acquisitions. The main aim here is to get a foothold in the growing company fitness market in other countries. In the longer term, an IPO is the goal. “There’s no rush,” says Roesch-Schlanderer, “but we want to be very well prepared when the right moment comes.”
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