One of the questions I ask myself is, “where will the next trends in diet and exercise lead us?” I believe that you can find some hints in where venture capitalists are investing their money. I have some thoughts (that are purely my own as a consumer in this space) about them that I want to share as well.
The Race to Be the Peloton of Strength Training
At home strength training system Pivot this month announced it has raised $17mm in Series A funding, led by DCM. It is targeting a similar market as Peloton: people who want the experience of a group fitness class without leaving home. Instead of cycling, Pivot focuses on strength training. Pivot uses AI to analyze reps and form, providing this data to the live remote instructors so they can provide real-time feedback. The costs for Pivot have not been announced, but the system will include all necessary equipment. Pivot is based off of their prior B2B product, SmartSpot, which uses video of the person being trained to analyze their form, allow a video of their workout to be played back, and provide feedback on their technique. I’m expecting Pivot to have something similar, with the addition of some sort of smart equipment.
There are similar companies that do this. Tonal offers a home system with white glove setup in your home. Tonal’s machine uses cables with sensors to assess where the quality of reps and the appropriate weights for you. At $2,995 for the machine and $49/month subscription, it’s priced higher than Peloton ($2,200 plus $39/month subscription). Tonal most recently raised $45mm in Series C funding in April with L Catterton as the lead. Tonal has raised a total of $90mm since 2015. In terms of funding, Tonal has a serious leg up on Pivot.
Pivot’s differentiator, however, is data: leveraging data captured in SmartSpot, Pivot is starting with a strong dataset of 1 million tagged workouts to base the AI on. Using the data from those workouts, a product such as Pivot can use machine learning to detect how the current user compares to recorded good form and offer corrections or confirmation, and suggested training path. When a new AI product is launched, it starts with no data, and significant time and resources have to be spent capturing and processing the data. By already having this data, Pivot has a head start on many competitors who are trying to get into the at home fitness class space.
I will be interested to see what the personal trainer and fitness class landscape looks like in 5-10 years. Surely there will always be people who prefer going to a live trainer or class, and trainers will not become obsolete. It will also attract people who never would have gotten a trainer, which doesn’t take any market share away from in person trainers. However, that doesn’t mean there wont be an impact. Think about self-checkouts: while grocery stores still have cashiers, they now have less of them. With self-checkout machines, less cashiers are needed to process the same number of customers. That might not be feel-good news to hear for the trainers who had brought SmartSpot into their gyms and whose data is being leveraged to build Pivot.
[Venture Beat, BusinessWire Press Release, CrunchBase for Pivot/SmartSpot and Tonal]
Plant-Based Foods Continue to Grow
Emergy Foods raised $4.8mm in its first venture round (lead by Congruent Ventures), having previously raised $1.3mm in grant funding from National Science Foundation, DoE’s Argonne National Laboratory, and Chain Reaction Innovation. Emergy focuses on creating plant-based meat substitutes with the flavor and texture of muscle meats. They are hoping to differentiate themselves with their chicken and pork offerings initially. It’s more difficult to create a good chicken or pork substitute than beef and brands such as Beyond Meat BYND -4.38% and Impossible Foods have not yet been able to master these. While the protein source has not been disclosed, it does not contain soy, wheat, or pea protein. Their previous company produced protein snacks made of mycelium, a fungus byproduct of brewing beer. [Nosh]
Microphyt, a micro algae biotech firm, has raised €28.5 million (led by Bpifrance and Sofinnova Partners). They will use the money to fund development and supply of their micro-algae nutritional and beauty products. While algae might seem foreign as a nutritional component on first glance, spirulina supplements are already widely sold. [Biomarketing Insights, CrunchBase]
Kencko, a direct-to-consumer smoothie company, raised $3.4mm in seed funding. Additional funds will be used to increase their flavors offered from 6 to 12 and to develop compostable packaging. Kencko takes a food as medicine approach with smoothies focused on improving performance, skin health, and immune support, among others. [Nosh, New York Business Journal]
CBD Funding Not Bigger in Texas
Despite the CBD craze, farmers in Texas as having difficulty funding hemp production after the recent legalization of industrial hemp. Problems may be due to the uncertainty of true demand and pricing, and to regulations not being finalized by the state government. After the state finalizes the rules, the USDA will need to approve. Due to the long horizon for investment in hemp, it’s unlikely to attract much venture capital funding. [Houston Chronicle]
Volleying for Attention
P1440, the first digital platform dedicated to beach volleyball and led by former Olympian Kerri Walsh Jennings has raised an undisclosed amount from Theresia Gouw, co-founder of Aspect Ventures. Funding will be used “to create more content, like tutorials and fitness videos, as well as to obtain live rights.” Walsh Jennings aims to create a lifestyle brand based on p1440 (living with passion and purposes for all 1,440 minutes in a day), as well as a resource for beach volleyball. They are aiming to reach what they say are the “900 million global [volleyball] participants,” which seems like an extremely high estimate for the number of participants based on Volley Country’s estimates from 2015. [p1440, Volleyball Mag, BNN Bloomberg]
What I think is interesting about this is it shows the larger trend towards specialized communities. While I have my doubts about the number of worldwide volleyball participants, there’s no doubt that there is a community around volleyball. Our online communities continue to become more and more specialized. It would make sense that people who are interested in volleyball would want to learn more about it and find like-minded people to connect with. The sense of belonging from being included in a community is what gives it the possibility of a lifestyle brand. I see this as an acknowledgement that this shift is already happening, and a bet on someone with name recognition (Kerri Walsh Jennings) and a solid vision being the most successful community in the space.