CureFit in talks to raise $25-30 million in fresh funding
Bengaluru: Healthcare start-up CureFit Healthcare Pvt. Ltd is in advanced talks to raise $25-30 million in fresh funds as it seeks to expand its fitness brand Cult, enter new markets, and launch health-related services, four people familiar with the matter said.
CureFit’s existing investors Accel Partners, IDG Ventures, Kalaari Capital and UC-RNT fund are all likely to put in money as part of the new round, which may also see at least one new investor come in, the people said. CureFit’s valuation may exceed $100 million, though final terms are yet to be decided, they added.
A large part of the fresh capital will go toward opening more Cult fitness centres, the people said.
CureFit, which currently operates only in Bengaluru, plans to enter Gurgaon next quarter and expand its food delivery network, they said. The company will also introduce health-related services to complement its fitness and food offerings, they said.
CureFit declined to comment on the fund-raising talks.
Started in March 2016 by Mukesh Bansal, former CEO and co-founder of fashion retailer Myntra, and Ankit Nagori, a former senior leader at Flipkart, CureFit has raised more than $20 million so far in capital.
Its $15 million fund raising in July 2016 from venture Kalaari Capital, Accel and IDG was one of the largest early rounds of funding ever by an Indian start-up. This month, CureFit raised roughly Rs2.2 crore from Trifecta Capital and Pratithi Investment Trust, the family office of Infosys Ltd co-founder Kris Gopalakrishnan.
The large amount of capital has driven one of the most aggressive launches by a start-up. Last month, CureFit bought Bengaluru-based yoga centre brand a1000yoga to expand its mental wellness offering—its third acquisition after Cult and Tribe, another offline fitness centre.
CureFit introduced its app in May in Bengaluru aiming to be a one-stop fitness hub for customers. The company’s business is built around its Cult fitness brand, which offers non-equipment fitness activities such as Zumba and martial arts. In a 21 June interview, Bansal said the company plans to have 30 Cult fitness centres by the end of the year and as many as 500 centres over the next five years. There are 15 Cult outlets in Bengaluru now.
Apart from offering Cult subscriptions, CureFit also sells health food subscriptions and mental wellness content.
Less than two months since launching health food subscriptions, the company already clocks 1,000 orders a day, one of the people cited above said. It will expand food delivery services to more areas in Bengaluru this year, the person added.
CureFit is one of India’s most closely-watched young start-ups primarily because of the high profile of its founders, Bansal and Nagori, and its aggressive expansion strategy. Critics say the strategy is too risky and the company is trying to do too many disparate things too fast.
CureFit maintains that unlike most Internet start-ups, its business model generates lots of revenues and cash flow from the start.
Bansal said in the 21 June interview that the capex (capital expenditure) payback period for every Cult centre is just 15 months.
He said then that the 500 Cult centres planned over the next five years may generate $250-300 million in revenue as well as cash flows of $50 million.
The proposed participation of the venture capital firms, Accel, Kalaari and IDG, in CureFit’s new round indicates that early-stage investors are doubling down on what they believe will be their standout investments.
Over the past 18 months, there have been few break-out start-ups, leaving investors who had raised large funds in 2015 and 2016 desperate to find the next big thing that can justify their fund sizes.
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