Salut raises $1.25M for its virtual fitness service
This morning Salut, an app-based service that allows fitness trainers to host classes virtually, announced that it has raised $1.25 million in a new financing event. The round was led by Charles Hudson, an investor at Precursor Ventures.
Founder Matthew DiPietro, formerly of Twitch, told TechCrunch that Salut soft-launched in mid-September, with a wider release coming today.
DiPietro thought up the concept behind Salut before the pandemic hit, he said during an interview, but after COVID-19 appeared the idea took on new urgency. The company put together what DiPietro described as a no-code alpha version of the service in May to test the market, allowing the then-nascent startup to validate demand on both sides of its marketplace - it's famously difficult to jumpstart two-sided marketplaces, as demand tends to follow supply, and vice-versa.
The test allowed the company to get to confidence on demand existing from both trainers and exercise fans, and in its initial economic model.
With the new round in the bank and its product now formally launched, it's up to Salut to scale rapidly. The company currently has 55 registered trainers on its platform, a reasonable start for the seed-stage startup. It will need to grow that figure by a few orders of magnitude if it wants to generate enough revenue to reach an eventual Series A.
But Salut is not focused on early-revenue generation, taking no cut of trainer revenue today. Indeed, per an email the company sent out to its users this morning, the startup is passing along 100% of post-Apple income that trainers generate, or 85% of the gross.
Currently users can donate to, or tip, trainers that host classes. DiPietro told TechCrunch that subscription options are coming in a quarter or two. The startup also announced today that trainers can now allow their classes to be replayed, what the startup called one of its most requested features."
Anyone familiar with Peloton understands why this matters; only a fraction of classes on the Peloton ecosystem are live at any point in time, but the bike comes with a library of content that users can simply load up whenever they like. This also allows Peloton to release more niche content than it otherwise might, as even the heavy metal-themed rides can accrete a reasonable ridership over time (something they might not be able to manage if all classes on the platform were only live once and then gone forever).
DiPietro is bullish on building income streams for trainers, especially during a pandemic that has locked many gyms, leaving fitness processionals with little to no income in many cases.
There's some early signal that users are willing to pay, the company said, with early users willing to pay $5 or $10 for an hour of fitness training. And with a focus on the long-tail of trainers who can't attract 10,000 fans to a single class, Salut thinks there are a large number of trainers who have enough pull to generate more income from its service, in time, than they could at a traditional studio.
Salut supports group video classes, of course, so trainers can collect monies from cohorts of users at a time.
The company's fundraising is largely earmarked for engineering, with the company having what its founder called an ambitious product roadmap.
The startup also announced a new project with Fitness Mentors, a company that helps trainers get certified, to create what the two companies are calling the industry's first Virtual Group Fitness Instructor (V-GFI) course and certification."
You can see why Salut would want the certification to exist; its existence will allow users of its service to find trainers that are worth their time on its service, and may raise the overall level of quality of classes provided.
Let's see how far Salut can get with $1.25 million.
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