The technology industry at large might not be in the best of health at the moment, but health and fitness startups appear to be alive and well. EGYM, the Munich-based \u201csmart workout solution\u201d business, has agreed to a monster equity investment of \u20ac207 million ($225 million) on the back of a very strong year of growth, led by the investment firm started by Jared Kushner.<\/p>\n

The company\u2019s business includes both a line of connected hardware (its own gym equipment); software (apps and diagnostics to measure and optimize how people work out on EGYM\u2019s and other connected fitness equipment); a corporate health network operation called Wellpass with more than 2.5 million users; and a mission: to improve healthcare outcomes by focusing on \u201cthe shared economy of a gym,\u201d in the words of CEO and co-founder Philipp Roesch-Schlanderer.<\/p>\n

\u201cNinety-nine percent of the market is repair versus prevention,\u201d he said of the approach to healthcare and its focus on chronic conditions treated with medicine and related therapies, an approach that he believes would be less likely, and less expensive, if people exercised and treated their bodies better. \u201cWe want to shift that.\u201d<\/p>\n

You can argue that this is a gross over-simplification of the state of global healthcare market today, but you might argue less with EGYM\u2019s numbers.<\/p>\n

The business brought in $130 million in revenues in 2022, growing 70% year-over-year. Wellpass, a big focus for the company going forward, grew 100% in the same period. En route to a future IPO, it expects to double down on newer markets like the U.S. and become profitable while doubling overall revenues to $260 million in 2023.<\/p>\n

And in a difficult year for fundraising when investors\u2019 attention seems mostly focused on AI startups, EGYM\u2019s round is one of the biggest to come out of Europe.<\/p>\n

All the more interesting, then, when you consider the lead investor. Affinity Partners \u2014 the Saudi-backed, Florida-based investment firm founded by the son-in-law and close confidante of former U.S. President Donald Trump \u2014 is leading the round, with previous backers Mayfair Equity Partners and Bayern Kapital also participating. This is a Series F, and EGYM said that roughly half of it, \u20ac107 million, will \u201cflow immediately\u201d with the remaining \u20ac100 million on the table for future use.<\/p>\n

The first tranche is coming at a post-money valuation of \u20ac600 million. Based on the company\u2019s growth rate \u2014 which is currently at a rate of 70% year-over-year for the full business \u2014 Roesch-Schlanderer said that when the second tranche is drawn down, it will likely be at a higher valuation.<\/p>\n

EGYM\u2019s current flush period comes after nearly 14 years in business \u2014 it was founded in 2010 \u2014 and nearly going bust during COVID when all gym activity grounded to a halt. And the idea had a very classic beginning: it came to Roesch-Schlanderer to solve his own problem; specifically, his own failings when it came to exercise.<\/p>\n

\u201cIt all started with me being an unsuccessful gym goer,\u201d he said in an interview, explaining that typically while people are shown how to use the array of machines at their gyms, they\u2019re largely left to their own devices after that. \u201cI tried to understand why I and so many others fail to work well there.\u201d<\/p>\n

Roesch-Schlanderer, who studied tech entrepreneurship and management at university, predictably saw a business opportunity in that question \u2014 one that could be answered with technology.<\/p>\n

\u201cI realized that those who work well either have trainers or themselves backgrounds in exercise science,\u201d he said. \u201cSo we decided that we could make the gym work if we provided an AI-based trainer to every user.\u201d<\/p>\n

And that is, in effect, what the company\u2019s longer-term goal has been.<\/p>\n

The business started very much focused around its own hardware coupled with basic usage measurements based on people exercising on EGYM\u2019s own equipment. Over time, the company has been slowly incorporating more sophisticated tech into the mix, and making the software work with other equipment. The AI-based personal trainer he speaks of has yet to be rolled out, although there has been more machine learning incorporated into the product on the road to more personalization.<\/p>\n

\u201cWe think in the next two years we will perfect this,\u201d Roesch-Schlanderer said of the AI service.<\/p>\n

That has also changed the makeup of the business: These days the hardware\/gym equipment part of the business \u201cremains an incredibly important piece\u201d of the EGYM business, but it also now accounts for only 25% of the company\u2019s revenues.<\/p>\n