The fitness and wellness industry is believed to be getting close to the magical figure of Rs 10,000 crore by 2015 end, with close to 10 to 15 per cent of people joining gyms and wellness centres year-on-year.
Catching on the ever flourishing in vogue trend of Silicon Valley, Bengaluru-based fitness marketplace Gympik has taken the acqui-hiring route to gain access to the talented start-ups. The company has recently acqui-hired FitnessPapa, yet another fitness start-up, known for offering a monthly membership program called ‘FitnessPapa Passport’.
Started in March 2015, FitnessPapa is the brainchild of Saurabh Kumar with a small team of two hi-tech individuals. Even though run by a tiny team of three, FitnessPapa has covered almost 600 centers across Bengaluru, Chennai and Coimbatore under its umbrella.
About acqui-hiring deal
In a bid to scale up the technical aspect of its venture, Gympik acqui-hired FitnessPapa to offer elevated position to all its team members.
“It was a small team these people (FitnessPapa) had and they were into a very specific thing, where they were launching the class-passes thing (FitnessPapa Passport) for all the centres. The idea is to launch that thing with Gympik, which is something, we wanted to do in the future and we have better competency to do that. So, we thought of getting these people on board and the acquisition we did on terms of equity, so it’s a full-fledged equity deal,” informed Amaresh Ojha, Founder, Gympik.
He further added, “On the terms of equity percentage, we are still working on.”
FitnessPapa: Role play
Presently, Kumar has joined the Gympik's core team and he’ll be doing a lot of other things as well, apart from what he has been doing in FitnessPapa. He’ll be in the senior management, informed Gympik Founder.
The three founding members of FitnessPapa, who worked mostly towards the technical aspect of their venture, would be a part of the technical team as well, noted the fitness platform.
Elaborating on the same, Ojha said, “FitnessPapa also had two business management people, who have already merged into Gympik business management team. For Saurabh, we are trying to figure out what he handles, but he is going to head one of the verticals that we have planned.”
USP required for acqui- hiring
The aggressive innovation and implementation of organised system into the practice has led fitness industry to grow manifolds. Tech start-ups like Gympik, which aim to shift the unorganised fitness industry towards organised trade, sees a big trade advantage in FitnessPapa.
“The unique part was their team. These people were really dedicated. Instead of having a very small team, these people could fetch a very wide range. They had covered 600 fitness centres and they have a full-fledged tie-up with all those fitness centre owners. It was like a great trade advantage. At this point of time, we are looking at mainly to put a good team on place to look for a bigger round of funding,” explained Ojha.
Reportedly, Indian fitness and slimming industry, which was pegged at US$ 0.78 billion in 2012, is stated to grow at a CAGR of 25 per cent to reach US$ 2.4 billion by 2015 end, says International Chamber for Service Industry (ICSR).
Prior to acqui-hiring deal, Gympik had signed a strategic deal with Brand Capital, a separate entity of Bennett & Coleman which is more into private equity. It backs long-term brand building efforts of start-ups.
“Brand capital deal is a little tricky deal. They don’t invest direct currency, but open all the media channels of Times of India group and it becomes cashless. So, I can use any of the existing channels of Times of India that includes Print, radio, TV, even internet. The deal includes offline things also. We are going to use all these channels basically to advertise our product and create awareness about what we are trying to do,” explained, Gympik Founder.
Further commenting over the deal size, Ojha said, “Size of the investment is around US$ 2 million and terms are very flexible. They don’t take equity right now; they come out with future valuation. So, that’s not yet finalised. Fully, they’ll convert this deal into equity share after about two years.”
Interestingly, Gympik has a personal trainer model. Under this, the company send trainers to the consumer’s doorstep and help them workout with a fitness expert. “This is something we are going to advertise aggressively,” informed Ojha.
The start-up which is on an aggressive acqui-hiring mode, has elaborate plans of raising more funds for further expansion and scaling. “We are in the process of raising good amount of money now. We are talking to 3-4 investors, about which, will disclose soon. Of course, we will be acquiring aggressively, going forward,” unveiled Ojha.
Previously, it had also raised US$ 135K in its seed round of investment from a group of angel investors including, Capvent’s Managing Partners Tom Clausen and Rohan Ajila