Fitness app Aaptiv raises from Insight Partners, launches Enterprise channel
With a lot of towns instituting shelter-in-place orders to restrict how people physically interact in order to slow down the spread of the novel coronavirus, fitness has come into its own.
In places where people are still allowed outdoors to exercise, we've seen an explosion of independent exercising like walking, running and cycling - often in conflict with each other, if my Facebook community board is anything to go by - to get the most out of being allowed outdoors. And in cases where people are remaining indoors, figuring out exercise regimes within our four walls has become a way to stave off boredom, to offset the cessation of our normal gym or sports routines, or just to stay in shape in our newly extra-sedentary lives.
In that context, a startup called Aaptiv - a Netflix-style app-based business that connects people to a range of trainer-led indoor and outdoor fitness and wellness sessions that they can do on their own, usually without any special equipment - is today announcing that it has raised some funding from one of its big investors, Insight Partners, on the back of a recent surge in business.
Founder and CEO Ethan Agarwal says the the number of people using the service during the novel coronavirus outbreak has spiked, with organic traffic in the last month up 100% and engagement with content up 200%. Aaptiv has now passed 30 million classes consumed on its platform (up from 22 million in May last year). The company, like many startups, is not yet profitable but is coming close to breaking even.
The new infusion of funding will be used to continue expanding a new Enterprise channel that Aaptiv recently launched to provide classes via API, on other platforms. Aaptiv's partners include FitReserve, Weight Watchers and Audible (Amazon, owner of Audible, is one of Aaptiv's investors), and the list is growing.
We asked, but Agarwal said that Aaptiv is not disclosing the amount of the investment, nor its valuation.
"I don't want my company's performance or success measured by those numbers," he noted earlier today in an interview. "It's not how we are thinking about the company."
That could mean the round or valuation are not huge; or it could mean that they are so large that they would distract from the company's product news, so not much to read into that. Insight Partners' Thilo Semmelbauer, who sits on the board of the company, was equally quiet on the numbers.
"Crossing 30 million classes is a big milestone, and we've been excited to see the interest from corporates increase substantially in recent months," he told TechCrunch. "The round is specifically for launching Aaptiv's corporate offering to capitalize on such strong global interest. As the company is nearing break-even we aren't disclosing the figure at this time."
Insight earlier this month disclosed that it had raised a whopping $9.5 billion for a new fund, with a mission to support existing portfolio companies through these complicated COVID-19 times.
For some more context, Aaptiv has raised over $60 million to date, and in its last round - the $22 million Series C in 2018 that included Amazon - Aaptiv was valued at $200 million. Last year, we noted that the startup was talking to potential acquirers to be sold for what we understand from a close source to be a "nine-figure" (hundreds of millions of dollars) price.
It was, in fact, those M&A conversations that led the company to deciding to build the enterprise tier and walking away from a possible exit for now.
"What was the point of selling if we could build a bigger business by making Aaptiv available to multiple companies," said Agarwal.
Agarwal said that now Aaptiv is getting inbound interest from "multiple verticals" for its B2B2C offering, including businesses that want to integrate Aaptiv into their employee wellness programs, companies whose core business model - for example, FitReserve providing carnets of passes for in-person fitness or related classes - has been completely stalled by the coronavirus, and others that might benefit from providing more fitness and wellness services to their users.
The company started out life by connecting a network of trainers to users through a series of on-demand classes. Last year, however, it made a small pivot of sorts when it launched an AI-based service called Coach that aimed to provide workouts and other suggestions more tailored to your specific abilities and interests and goals: not replacing the human trainers, but augmenting them.
Along with that shift, Aaptiv laid off an unspecified number of trainers. Today, it has 20 on staff, Agarwal said, and has no plans to change that model with a move into, for example, an all-AI platform, or building a fitness marketplace where any trainer could sign up to offer classes.
"Part of the reason we are so successful is because it's not that easy to create these classes," he said. "We, and the trainers, put a lot of time, effort and energy into building them."