CureFit raises $120 million in round led by IDG, Accel
CureFit to deploy funds to accelerate expansion of fitness chain, food brand, clinics
Bengaluru: In the biggest ever fund raise by an Indian healthcare start-up, CureFit Healthcare Pvt. Ltd closed a $120 million round of funding, led by existing investors IDG Ventures, Accel Partners and Kalaari Capital, to help accelerate the expansion of its fitness chain, food brand and clinics.
New investors Accel Partners US and Oaktree Capital also participated in the latest funding round, which confirms the view that funding for internet startups has picked up in a big way this year following two years of poor investment activity.
The company will use the fresh capital to expand its offline footprint to 1,000 centres from 80 centres within three years, co-founder Ankit Nagori said in an interview. By 2022, Cult, the non-equipment fitness chain, will have 500 centres, with the rest comprising its food brand Eat.fit, clinic chain Care.fit and yoga and meditation chain Mind.fit.
The firm will also invest heavily in building tech products on its supply side, buy companies and introduce hardware products like glucometers, weighing scales, fitness wearables.
“This business will require a lot of runway because we are building a category. Although we are cash-flow positive at the GP (gross profit) level, having lots of capital will allow us to focus on building the product with a long-term perspective. The funding is a testimony of the product we’ve built. There’s a lot of buzz about the brand,” Nagori said, adding that the company will expand to 10 cities from three cities.
He added that the company was also planning to expand to international markets in Southeast Asia and West Asia.
Mint had reported in April that CureFit was in talks to raise a fresh round of capital. The company earlier wanted to raise $75-100 million, but increased the size of its round because of strong demand from existing investors.
Since starting out in April 2016, CureFit has now raised $175 million in equity and debt. CureFit said it needs the capital because it is creating a new category the same way Flipkart introduced millions of Indians to e-commerce or Ola to ride hailing.
Other healthcare startups such as Practo, which had earlier raised the single-largest funding round by a healthcare startup in 2015 when it received $90 million, and 1MG have taken different approaches toward tapping increasing demand for health products and services.
While CureFit is attempting to become a one-stop healthcare hub, Practo focuses on helping customers book doctor appointments while 1MG offers over-the-counter medicine. In short, CureFit’s vision is bigger, but also, riskier.
“Right now, health and fitness is seen as a need-based category. What we need is to create a very cool category. If there’s a market leader doing that, then people will start flocking to fitness and health. So how cigarettes and drinking has become cool, we want to do the antithesis of that and make people understand that being healthy is the best thing you can do. That will require a lot of events, marketing, content,” Nagori said.
CureFit represents one of the biggest bets ever for venture capital firms IDG Ventures, Accel Partners and Kalaari Capital. These three early stage VCs have pumped in large amounts into the startup since its first round in July 2016.
Their big bet on CureFit is evidence that there’s a dearth of high-quality internet companies for venture capital investors who had increased their fund sizes over the past three years in expectations of a gold mine that didn’t materialize.
Instead of an internet boom such as the one seen in China, India’s digital growth has been uneven. That has increased the attraction of a handful of scaled-up, quality startups such as Zomato, Swiggy, Byju’s, CureFit and Sharechat. These companies have led the funding revival in the country’s internet startups this year.
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