GymZap

www.gymzap.com

Donnersbergerstr. 27 D-80634 Munich
T. +49 (0) 8165 409 4578
F. +49 (0) 8165 409 4579
info@gymzap.com

Founded in September 2010

Contact person: Radostina Ruseva, CEO, radostina@gymzap.com

Business Summary: GymZap provides the technlogy enabling fitness centers to offer trainings online against payment.

Business Model: Our business model is based on software licensing fees. Our software is provided as a software as a service to fitness centers. We provide two subscription schemes: user-based and a flat-rate scheme. Both can be tested at 40% of cost for the first 6 months. The user-based contract amounts for 5000 euro a year for the first 500 users (10€/user/year, around 1€/user/month) plus a one-time installation fee of 1000€ for the fitness centers who need installation.

Example: In Germany an average of 60% to 80% of gym subscribers do not resign their contracts and the average acquisition cost is 50€/user. The average monthly subscription fee is 50€.

Without GymZap_________________________ With GymZap
loose 300 subscribers_____________________Loose 270 subscriebrs (+ 1500€)
revenue down by 180.000€ _________________Revenue down by 162.000€
_______________________________________10% resubscribe, 50 (+ 2500€)
Current state: 500-300 = 200 subscribers______Current state: 500 – 270 + 50 = 280
Target: 550 subscribers, 350 new ___________Target: 550 subscribers, 270 new
Acquisition cost 17.500€ ___________________Acquisition cost 13.500€ (↓22%)

Customer problem: Fitness centers' biggest problem is the low retention rate as opposed to high acquisition cost. Currently German fitness centers loose 60% to 80% of their subscribers after the first year.

Our solution: GymZap is a powerful user retention and marketing instrument for premium fitness centers. We help fitness centers keep them clients by leveraging the retention-rate by at least 10%. We also help fitness cenetrs win new customers by providing them with an additional service and a flexibility argument which makes their buy decision easier. Our software also provides important cockpit information about the popularity of certain sessions, instructors and times which decision makers can use to control their business better. Last but not least, we also integrate a community for the fitness centers subscribers, because social media is the most effective way to keep customers.

Our customers target and our sales/marketing strategies: Premium fitness centers, currently we reach them through LinkedIn and XING

What is your target market? Total market potential in Germany: 6000 studios with an average of 1500 users = 90.000.000€. There are 2000 premium fitness centers, corresponding to a total market size is 30.000.000€

Who are your primary competitors: There are a number of livestreaming, e-learning and webconferencing software solutions which could be used to implement live fitness sessions. None of them, however is focused on the fitness industry and their installation would involve high cost for the fitness centers to implement it on their own. Furthermore, by scaling the service to many fitness centers we also scale our streaming cost which are the main driver of the variable cost. For newcomers and single-providers those would be too high to be profitable. We consider copycats teh main competitor. However, once installed, fitness centers would usually face high switching cost for comfort reasons involving their own subscribers.

Our competitive advantage: We have been working on the problem since 18 months, and already have the software implemented, so we will be faster then newcomers. We are also trying to close strategic partnerships with key players on the fitness market in order to strengthen our position.

2 - Financial Information
We have financed the venture by personal means since january 2010. We have also received a couple of prizes in 2010 which also helped us in the financing. We are currently using a free office space at the LMU Entrepreneurship Center and receive a federal start-up grant in amount of 100.000€ since April 2011 for one year. We are lloking for an investor whom we may gurantee 10xROI in 5 years.

2012______2013________2014_____ 2015_____2016
Revenues: 1.000.000_____2.000.000____5.000.000__9.000.000__15.000.000
COGS: 280.000______560.000____1.400.000 __2.520.000__4.200.000
Operating expenses: 400.000______400.000_____400.000___800.000___800.000
EBITDA: 320.000_____1.040.000___3.200.000__5.680.000_10.000.000

The profit statement is based on our very low cost of goods sold and maintenance cost. At a user-based license for 500 users, which costs 5000€, we face streaming cost of around 100€ a month (50% of the users=250 users watch online once a week), which is 1200€ a year. This corresponds to a gross margin of more than 75%.

• Paraskevas Paraskevas wrote (1 year ago):

  Many startups are now looking for funds in the Middle East and especially in Dubai and Katar so try to find finance there....
  

  • Reply