Montréal-based startup Silofit, which offers a network of micro-gyms, has raised $12.75 million CAD ($10.25 million USD) in Series A funding to fuel its United States (US) expansion efforts.
The all-equity round, which did not involve any secondary capital, was led by previous investor Whitecap Venture Partners. It also saw participation from real estate tech investor Alate Partners and New York-based Courtside Ventures, both of whom previously invested in Silofit. Two new investors also took part in the round: hospitality entrepreneur David Grutman and Fitt Ventures, a new venture fund from fitness publisher Fitt Insider.
”A third of gyms are expected to be closed or completely shut down post-pandemic, so there’s going to be thousands of trainers looking for a new home.”
-Wilfred Valenta, Silofit
Silofit also secured an additional $2.5 million CAD in debt financing from Silicon Valley Bank. The new capital brings Silofit’s total funding to date to $19.4 million.
Given COVID-19’s impact on brick-and-mortar gyms and commercial real estate costs, Silofit sees a big chance to expand and gain market share by bringing its on-demand, micro-gym model to the US. The startup plans to use its new capital to give American trainers and fitness users an alternative to traditional gyms.
Founded in 2018, Silofit turns small office spaces into private micro-gyms, which it refers to as ‘silos,’ and are used by fitness trainers and their clients, as well as individual gym-goers. Silofit currently offers 20 workout spaces across Montréal and Toronto, cities that have been hard hit by a number of public health-mandated shut downs, affecting Silofit’s gyms. Despite this, the startup claims to serve over 12,000 users and 3,000 trainers through its app. The company says its flexible model offers users a more private and affordable alternative to traditional gyms.
The pandemic has hurt the traditional brick-and-mortar gym industry, forcing many gyms to either operate at limited capacity, temporarily shut down, or close completely to limit the spread of COVID-19. This has led many trainers and fitness users to seek alternative workout arrangements, and contributed to what some have described as a permanent shift in the fitness industry.
“On the demand side, a third of gyms are expected to be closed or completely shut down post-pandemic, so there’s going to be thousands of trainers looking for a new home,” Wilfred Valenta, Silofit’s co-founder and CEO told BetaKit. “And that’s where Silofit comes in.”
Valenta said there’s a “huge opportunity” for Silofit to enter new markets and provide fitness professionals with the physical space and digital tools necessary to build their personal training businesses. Silofit is also a solution for empty office spaces, as it uses those locations for its gyms.
Although COVID-19 hurt Silofit’s business in some respects, Valenta said, “overall, it was a net positive,” adding that “it allowed [Silofit] to expand [its] physical footprint within a depressed real estate environment.”
Silofit rents and outfits its workout spaces, charging per use booking fees. Users can book these spaces and time with trainers using Silofit’s app. Silofit also derives revenue by taking a commission on trainer sessions booked through its app, and charging users a fee on the digital content they purchase from its fitness professionals.
Armed with fresh Series A capital, Silofit is eyeing those office spaces and plans to take its micro-gym model to the US. The startup intends to open 50 new workout spaces across five American cities, beginning with Chicago and Miami, where its new US headquarters will be based.
“Silofit is very well positioned to become the largest fitness platform in North America,” said Shayn Diamond, partner at Whitecap Venture Partners. “Their unique approach to this market brings together bricks and mortar micro-gyms with a digital ecosystem that enables fitness trainers to run their business and provide a stellar user experience for their clients.”
Valenta said the startup’s target customer is trainers looking to “unbundle” themselves from traditional gyms, which he claimed tie down trainers with contracts and take 60 to 70 percent cuts of their profits.
“Our target market is that trainer that wants to double their business and use this as an omnichannel platform to not only build their physical training business, but also their digital business as well, such as workout programs and their brand,” said Valenta. Silofit has an in-house production team that helps trainers produce this content.
In addition to expanding its real estate footprint, Silofit also plans to continue investing in its tech, including the development of its fitness marketplace, which enables gym-goers to book a trainer and reserve a workout space or purchase a workout program. The startup is also developing its Silofit Pro platform, which allows trainers to create profiles, track their clients, manage their schedule, and sell exercise and nutrition plans.
Valenta said Silofit’s long-term vision involves a three-pronged approach: build physical spaces, layer on tech, and construct a connected fitness environment.
To help it achieve the latter, Silofit has signed a commercial agreement with Technogym. The move is a step towards Silofit’s larger goal of creating a smart gym that collects user exercise and health data from Technogym equipment, which Valenta said will make the startup’s ecosystem “extremely sticky.”
To tackle these goals, Silofit plans to add 25 more people over the next year to its current 50-person team.
Feature image courtesy of Silofit