Home fitness had a huge moment at the outset of the pandemic -- and understandably so. People were stuck at home, gyms closed and suddenly workout options seemed to dramatically decrease. As with the teleconferencing revolution, plenty of startups were waiting in the wings to pounce on the sudden opportunity.
As predicted, when the world got back to a state of relative normality, interest in some of the offerings waned. I certainly wouldn't suggest that gym reopenings were the only source of Peloton’s struggles, but an overcommitment to potential growth caught up with the company quickly as reality set in.
But much like teleconferencing firms, the pendulum swing certainly doesn’t mean the new technology is going away altogether -- though the herd will almost certainly thin. Today, London-based Quell announced a $10 million Series A led by Tencent and featuring Khosla Ventures, Heartcore Capital, Social Impact Capital and Naval Ravikant.
“The COVID pandemic forced many gyms worldwide to close, giving the digital fitness sector an incredible tailwind that certainly benefited Quell in the early stages,” co-founder and CEO Cameron Brookhouse tells TechCrunch. “As the restrictions were lifted, gyms rebounded better and faster than expected, with some chains reporting that their membership numbers have returned to pre-pandemic levels,” Despite this, we haven’t seen a significant impact on investor appetite in the sector. Investors we’ve spoken to share our view that gyms are an unappealing "default" exercise option for most people; people go to the gym because there isn’t a more enjoyable option with the same efficacy and lower barriers to entry.
The shift in interest on the fitness side, of course, dovetails with the macroeconomic slowdown that has been impacting investing across the board.
“The current economic climate has had a significant effect on VC risk appetite, driving a hard correction versus inflated 2021 valuations and creating a much more competitive raising environment for startups. There’s a strong focus on numbers and a greater expectation of PMF evidence, even in early rounds,” says Brookhouse. “We’re starting to see signs of this relaxing a little earlier than many analysts predicted, with several of the VCs we've spoken to gaining confidence as they observe resilience in the private markets and see LPs continuing to invest in new funds.”
Quell takes a gamified approach to the market, with resistance bands designed for a more active gaming/workout experience. The system launched with the fighting game, Shardfall, with more titles down the road. The funding will go, in part, to expanding software, along with increasing company headcount.
“We’ll be growing our team from 30 to over 50, focusing this expansion on game and core platform development,” Brookhouse says. “The Series A will allow us to rapidly grow our live-service launch game, Shardfall, as well as to develop our next two games.”
The system currently is up for preorder for $249, with plans to ship this year. The company doesn’t currently offer a subscription service, but say it’s exploring the avenue. VR is a possibility, as well, but there’s not currently a specific plan to add that functionality.
“VR has opened the door to fantastic new and immersive experiences in the gaming sector, but it currently suffers from significant drawbacks in a fitness context,” Brookhouse adds. “Many people find the headsets too heavy and sweaty to work out with or suffer from motion sickness during high-intensity play. VR also lacks real resistance, which puts a ceiling on the efficacy of many workout types.”