Innovation Summit
Go inside some of the key moments, takeaways and insights from day two of the fitness and wellness industry’s premier event

Day two of the second annual ATN Innovation Summit shifted the conversation from identifying the forces reshaping fitness and wellness to exploring how the industry’s leaders are responding to them.

Across discussions on investment, M&A, AI, technology infrastructure, GLP-1s, breakthrough science and emerging competition formats, executives and investors emphasized execution over experimentation as the next phase of the industry’s evolution. A common theme emerged: success will belong to the brands that can pair innovation with disciplined growth, strategic partnerships and connected consumer experiences.

Here are some highlights.

Why Smart Money Is Moving Into Fitness With Jeffrey Katzenberg and Keith Barlow 

In a world of all things tech, the analog experience is fitness’s next frontier, according to DreamWorks co-founder Jeffrey Katzenberg and Xenom founder Keith Barlow.

Barlow’s emerging fitness competition brand, which Katzenberg’s WndrCo seeded with $15M in February, runs 10 events over two days and debuts later this month at Ford Center at The Star in Frisco, home of the Dallas Cowboys. 

“Every pixel matters when you’re creating a product built for this world, which is entirely omnichannel,” Barlow said of the changing landscape that has traded televisions for social media clips. 

For Katzenberg, investing in this space is both interesting and timely. 

“When you just look at the social connection of it — when you bring together the ability to actually create friendships and social engagements, and do it around something that is also making you healthier and fit — it just seems pretty logical,” Katzenberg said. 

— Courtney Rehfeldt

Is All in One Done? The Art of Building Today’s Tech Stack

Al Noshirvani, executive chairman at AltaDX, Zakaria Mansour, co-founder and CEO of bsport, Travis Shannon, CTO of Hapana, Jeff Sanders, chief growth officer at Energy Fitness and Mike Neff, EVP of Crunch Fitness spoke on the fitness industry’s natural progression toward more open APIs. 

Throughout the entire conversation, alignment between programs and services remained a central theme, specifically in terms of payments. 

“That is the one core piece that must be stable,” Shannon said. “It must be right, and the more that you change and mess with that component, the more risk.”

All-in-one programs were revealed to create far more complicated issues for managers than their title indicates. When everything is internalized, Sanders noted their effectiveness. However, once you need to “bolt on” other pieces, problems arise. 

“That becomes a challenge because the data doesn’t flow and doesn’t connect well,” Sanders said. “It becomes an issue for us on reporting and setting up automations. We have to start looking at ‘All-in-one’ as ‘Having everything you need in one and looking at what you can work with outside of that.’ That evolution of thinking is what operators have to start becoming honest with themselves on.”

On the topic of AI, Shannon and Mansour noted their brands’ recent investments in it. However, and in looking at the future, the group noted that its existence is already altering consumer behavior and expectations. Noshirvani noted that some customers are even beginning to build their own AI programs to make bookings for them. The group collectively pointed to consumers asking more out of these systems and adjusting to those asks as their top challenge for tomorrow. 

— Collin Helwig

M&A Valuations and Capital Flows in the HALO Sector

Pete Moore, founder and managing partner of Integrity Square and Brian Smith, managing director of Piper Sandler and co. took listeners through their pasts as banking analysts before breaking down what fitness brands looking to sell or raise capital need to prioritize today. 

Moore explained that due to contractual obligations, for independent operators who’ve owned clubs for over two decades, there are three clear buyers: Pure Gym, developers under Crunch Fitness and those under Planet Fitness. Moore and Smith also identified several key valuation drivers, including having a unique concept, a proven model, >30% margins and high ROIC. 

Moore went on to insist that having ambition won’t get owners to where they want to when looking to sell or acquire capital. 

“Show somebody what the playbook is and ask them to come and finance that plan,” he said. “Don’t tell them you’ll figure it out later. That typically doesn’t get a deal done.”

He also explained that strategic buyers won’t budge on certain boxes they need to check before moving forward with an asset. 

“There’s no empathy,” Moore said. “I don’t care if you’re friends with Mastroff. This is all about what the legal documents are and the royalties that they have coming in.”

Moore concluded by announcing the HALO 52, a collection of 52 publicly traded companies operating across the health, active lifestyle, and outdoors ecosystems, tracked by his team at Integrity Square and delivered to the audience. 

— C.H.

Inside the $7.5B Playlist-EGYM Deal: Live at the ATN Summit

Two of the biggest names in fitness tech shared a stage at the ATN Summit to explain why they’re now one company: ClassPass parent Playlist and fit tech firm EGYM.

The two closed a $7.5 billion merger 60 days ago, backed by $785 million in fresh capital and investors including L Catterton, Vista and Affinity Partners.

At the ATN Innovation Summit, EGYM and Playlist CEO Philipp Roesch-Schlanderer, Playlist co-founder and CEO Fritz Lanman and L Catterton managing partner Marc Magliacano outlined the deal, now a single wellness operating system spanning software, smart-strength hardware and corporate benefits.

Magliacano called it the most transformative wellness combination he’d seen in three decades. “The self-care revolution obviously is upon us,” he added.

Roesch-Schlanderer, meanwhile, set the ceiling high. “We believe we can build one of the biggest companies in the world,” he said.

For his part, Lanman noted that the merged company is a counterweight to an attention economy built to keep people staring at screens, with the goal of moving them into real-world workouts instead.

A public listing appears in the future, the executives said, with Palantir CFO David Glazer joining the board as its first independent director.

— C.R.

Flex(ible) Capital: How Today’s Brands Are Funding Growth

Kyle Widrick, founder partner of Pari Passu Venture Partners, Jess Yuan, partner at Founders Row, Neha Govindraj, founder and CEO of Bonside and Brandon Kaplan, founder of Maxwell explored the rise of alternative financing and what those emerging options mean for the long-term fitness franchising landscape. 

While there’s now an abundance of ways to financially back a fitness organization beyond just equity and debt, this panel agreed there’s no right answer for everyone, and the options widen as the business grows. These financial stakeholders also explained what they prioritize before investing in a brand. Yuan and Govindraj both mentioned unit economics while Widrick said he takes a second look at what stage the business is in and how much momentum it’s carrying. 

“Sometimes the best product wins, and sometimes the loudest product wins,” he said. “In today’s market, your ability to get out and get awareness on product, especially in this market, is incredibly important.” 

Widrick also emphasized the importance of personally evaluating a business and its products before supporting them, touching on his experience backing Ammortal. Soon after, Yuan stressed the importance of capital discipline, arguing that raising money should be viewed as a strategic tool rather than a finish line to celebrate.

“Now, you have to prove that valuation,” she said. “Capital discipline is honing in on exactly how much money the business needs and where you’re getting it from. Is it a partner that makes you better closing that capability gap that you couldn’t do without that partner? Everything beyond that is just dilution.”

After reinforcing the idea that owners must know their business inside and out before pursuing capital acquisition, the group wrapped up by sharing the sectors they’re most excited about from a business potential going forward. Widrick mentioned the peptide space, while Yuan spoke on the brain-health space and Govindraj listed tech enabled services. 

— C.H.

An Operators Perspective: What It Really Takes to Win in Franchising 

New York is still king when it comes to boutique fitness, particularly for ambitious franchise operators. 

“Right now, this is the hottest market by a mile,” Adam Shane, the owner of Yoga Joint New York, said of NYC. “I don’t think anything even comes close to anyone’s desire to bite off a piece of Manhattan and the New York market. I think, for a little bit, maybe in COVID, Miami was having a movement. I think it’s come full circle back.”

Looking across the U.S., panelists acknowledged there’s more competition than ever among fitness franchises fighting over the same desirable patches of real estate. 

“There’s more competition in the market in general between brands; everyone is going after the same 3,000 square feet space,” Nicole Charlock, the North America and U.K. performance director for Strong Pilates, said. “The same with talent recruiting; there’s more brands going after the top talent, so while there’s so much talent out there, everyone is hyper-focused on the same individuals.”

There was some disagreement among the panelists over whether fitness franchises should view themselves as competing with one another for market share, versus how much they’re competing with other forms of leisure and entertainment.

Shane believes that even for boutique fitness brands operating in different modalities — yoga versus strength training, for example — they’re still trying to capture the attention of the same fitness consumer. 

“We’re all competing for the same customer, even though they’re a little different, they’re pretty much the same,” he said. “And at the end of the day, there’s only so many people coming (to fitness studios).

— Josh Liberatore 

The GLP-1 Opportunity: How Fitness Is Adapting in Real Time

There’s no question that GLP-1s are reshaping the fitness industry, as new customers emerge and different health needs arise with more and more people hopping on the medication. To break down those shifts, AltaDX chief customer officer Tara Levitt spoke with Daxko chief sales officer Nick Thornton, Thrive COO Kiersten Fitzgerald and New York Sports Club digital marketing manager Aaliyah Picanso to understand how the changing landscape is impacting the industry across multiple sectors.

“It’s universally going into every segment of the industry,” Thornton told moderator AltaDX chief customer officer, Tara Levitt.

A key part of the GLP-1 integration in fitness has been strategic partnerships, with both Daxko and New York Sports Club forming relationships with telehealth provider Thrive.

 “The best success is when you’re partnering,” Picanso of NYSC noted.

“Our first prescription for anyone is exercise,” said Fitzgerald of Thrive. “Partnering with people in the fitness and wellness space was paramount.”

Fitzgerald believes that GLP-1s are already changing the trajectory of fitness being seen as preventative health care, while Thornton sees high demand among operators looking to have GLP-1-specific programs.

“GLP-1s are not fighting the fitness industry. GLP-1s are helping support the fitness industry,” Fitzgerald added.

At NYSC, Picanso has observed a new type of member entering clubs — while traditionally the brand tracks data like what kinda of workouts new members gravitate towards (strength training or cardio classes, for example), they are now seeing members driven by their GLP-1 prescriptions to exercise. That spurs GLP-1 users to cultivate a new lifestyle around fitness and wellness, Picanso pointed out.

— Ani Freedman

Pushing the Boundaries: Breakthrough Science Hits the Mainstream

Breakthrough science is no longer solely the inspiration for wellness products and brands — it’s becoming the basis for it. Acorn Biolabs co-founder and CEO Dr. Drew Taylor, One Hype Wellness founder and CEO Sat Randhawa and StemRegen founder and chief science officer Christian Drapeau sat down with Athletech News to discuss how scientific innovation is fueling their work in health, wellness and longevity.

Each company is carving out its own space for the next frontier of wellness, as Acorn Biolabs draws upon stem cell science to propel regenerative medicine forward, Taylor explained.

“We’re trying to return ourselves to a previous state of performance” using biology, stem cell research and the patients own cells to heal themselves he told ATN.

One Hype Wellness, meanwhile, is diving headfirst into neuroscience with its FDA-approved, FDA-cleared One Brain device that measures brainwaves and collects neurological data.

“We’re able to tell you exactly what’s going on with your brain so you can make smarter, data-driven decisions,” Randhawa said, while wearing the device himself onstage.

StemRegen is also tapping into the power of stem cell research to enhance health and support longevity. Drapeau, its founder, pointed to the importance of getting these science-driven products in the hands of consumers who ultimately carry the most weight in growing the brand.

“If you’ve got a product that really works, put it in the hands of people,” he told ATN.  “If the product doesn’t really work, it’s a blip. It grows and then it falls.”

For Acorn and One Hype, the same sentiment carries, with a particular importance in working with credible practitioners and bringing their products into medical settings. Acorn Biolabs currently works with over 200 medical practices across North America, while One Hype has proven popular among professional athletes and is looking to work with trusted doctors more.

“We want patients to go into clinics and challenge what they think the minimum standard of care is,” Randhawa said.

— A.F.

 

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