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Future of Fitness: Online or In-Person?

Companies and Markets

By Basil Hamadeh  |  March 2, 2021

Before COVID-19, hitting the gym or taking a class after work was a common way to get in the daily required exercise and stay healthy, especially for city dwellers. But as the virus outbreak progressed and the 2020 world not only pushed us to social distance and work from home, the simple idea of working out indoors with other sweaty strangers has many of us cringing in fear. While the future of traditional gyms remains unclear even though many are open offering full cleaning of equipment, enforced social distancing, and other safety protocols, we see that fitness habits and gym memberships are evolving.

Shift to the Suburbs

Particularly as many employees continue to work from home and homeschooling and online education remain the only solution for many households, going to the gym is no longer an on-the-way-to-work activity. And with New Yorkers and Bay Area dwellers alike fleeing their small apartment spaces and overpriced rent for the suburbs, they are far away from the fancy gyms and boutique studios whose membership were once a symbol of healthy living. With real estate selling fast in the suburbs, families not only are offered more space to separate kids from work but also have the new luxury of building their workout space at home.

At-Home Fitness and On-Demand Training Booming

Fitness-focused companies from subscription-based fitness platforms to traditional home fitness equipment sellers are seeing their businesses thrive. At-home fitness equipment sellers that also feature on-demand subscription-based fitness classes for users at home like Peloton and Mirror had already made a mark pre-COVID. According to FactSet, Peloton racked up an $8.1 billion valuation at its IPO in September 2019 and Mirror inked a $500 million deal to sell to Lululemon Athletica in June 2020. For these companies, the cherry on top was the double hit of COVID-19 and the nationwide lockdown for their business as at-home fitness became the only way for people to work out. Now as big names like Apple are joining the race to cash in on the at-home fitness trend with its $9.99 per month low-cost fitness program Fitness+, it’s easy to say that working from home will be a new norm.

Fitness-focused companies from subscription-based fitness platforms to traditional home fitness equipment sellers are seeing their businesses thrive.

Other startups are also taking a cut of the pie and gathering investor interest. Mirror competitor Tempo Interactive is gaining traction for their smart 3D sensor and artificial intelligence (AI) technology used in their fitness equipment that can analyze as well as give real-time feedback. Coupled with its on-demand subscription model, it attracted a Series B funding in June 2020 totaling $60 million after just raising a Round A funding five months earlier in January. FactSet data shows that this new capital boosted its valuation by four-fold. Another company cashing in on smart devices is Whoop, a privately-held company that offers a wearable consumer product and membership package that is said to monitor sleep, measure recovery, and help with fitness training. It joined the unicorn club after raising a $100 million Round E funding in October 2020, double the amount of its Round D funding raised just 11 months earlier. Lastly, Tonal Systems offers a similar product to Mirror with a wall-mounted fitness system but its focus is on strength training. Through subscription-based on-demand coaching and digitally connected personalized exercises as well as electromagnetics technology, the systems can offer just the right resistance for deadlifts and more. It has attracted a star-studded portfolio of athlete investors and corporates in its last round $110 million capital raised bringing edging it closer to the unicorn club.

Fitness Isn’t Always Trendy

Fitness equipment companies like Beachbody, Core Health & Fitness, and Icon Health & Fitness are not always spotlighted like the savvy trendy fitness startups previously mentioned. Beachbody is a privately held company that develops popular in-home fitness and weight loss solutions and derives its revenue from sales of its brands through television and direct marketing. Core Health & Fitness is one of the market leaders in producing some of the more popular stationary bikes, ellipticals, stepping machines, and other fitness-related products for the commercial as well as home use fitness industry. Icon Health & Fitness is a privately held manufacturer of home fitness equipment. Its product portfolio includes treadmills, elliptical machines, stationary bikes, home gyms, weight benches, yoga and Pilates equipment, hand-held exercise, and performance apparel. Although all three of these companies do not market a single type of fitness equipment, FactSet’s database of private company financials shows that these companies have maintained a strong business since their early founding through an established portfolio of products, helping beat down the effects of the pandemic.

Subscription Fitness

Obe Fitness is an up-and-coming privately-held subscription-based fitness platform offering online, live workouts through a digital platform and mobile app. While it doesn’t offer any equipment with its products, it reimagines the boutique studio classes experience and brings them to people’s homes. Coincidentally, Classpass, whose selling point had been offering access to multiple in-person boutique studio classes and has struggled with layoffs due to COVID-19, is also shifting its focus to online classes.

Traditional Gyms and Studios Struggle

With gyms only recently reopening in places like New York City, traditional gyms and other fitness studios have been struggling to stay afloat. 24 Hour Fitness, Gold’s Gym, NYSC, and Flywheel Sports have all filed for bankruptcy protection while other large studios have permanently closed locations. And even while gyms are opening up, restrictions like limited capacity, mandatory upgrades to facilities, and a strict cleaning regimen have made it hard for business operations.

With gyms only recently reopening in places like New York City, traditional gyms and other fitness studios have been struggling to stay afloat.

Nationwide gyms like 24 Hour Fitness, Gold’s Gym, Equinox, Anytime Fitness, and LA Fitness, who all offer pristine gym spaces, a range of top of the line fitness equipment, and in-studio classes, have all shifted their business model to continue to attract members, adding online on-demand fitness classes, in addition to access to their facilities. Meanwhile, Life Time Fitness operates as a health club with some facilities offering full-service gyms, basketball courts, pools, kid facilities, and day camps, while focusing on stricter cleaning regimes with the hope that members will return.

But not all gym owners have managed to turn around. Town Sports International Holdings who runs NYSC and Flywheel Sports have both filed for bankruptcy. Both have taken the approach of limiting gym openings, stricter cleaning practices, and set rules for gym users while they reconsider their operations and struggling finance in an attempt to emerge from bankruptcy. Town Sports International Holdings operates most of its full-service gyms in New York, Philadelphia, and Connecticut. Flywheel Sports, a Soulcycle and Peloton competitor, focuses on stadium cycling and group classes.


While it may still be too early to predict what is the future for physical gyms, newer service providers that offer at-home solutions—particularly ones that capture recurring revenue like on-demand subscription services—see a bright future. And with traditional gyms unable to leverage the advantage of the physical connection with other workout peers, driving an online community and building virtual connection may, in fact, be the new norm.

This article originally appeared in PrivCo Insights.

This blog post has been written by a third-party contributor and does not necessarily reflect the opinion of FactSet. The information in this report is not investment advice.

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Basil Hamadeh

Chief Executive Officer, PrivCo

Mr. Basil Hamadeh is the Chief Executive Officer at PrivCo, which tracks private company financial information in a proprietary database that is available on the Open:FactSet platform. Prior, he was the founder of AdLarem Fund Management, a buy-to-rent single-family home fund, and spent the majority of his career at Credit Suisse, working in multiple capacities. Mr. Hamadeh earned a degree in Business Administration from the University of California, Riverside.