Bengaluru: Healthcare start-up CureFit is rapidly expanding its fitness centre brand Cult inspired by the Starbucks cluster-of-stores strategy—a rare instance of an Internet start-up putting the offline channel at the heart of its business.
CureFit (CureFit Healthcare Pvt. Ltd), which bought Cult for $3 million last August, expects to have 30 Cult fitness centres in Bengaluru and Delhi by the end of the year from 10, and it plans to expand the brand to 500 centres over the next five years, co-founder Mukesh Bansal said in an interview.
Like Starbucks, which set up lots of stores in a given area in the US to leave little room—literally—for rivals, CureFit aims to have clusters of Cult centres in neighbourhoods. For example, in a 1-km radius in a Bengaluru suburb, the company will have as many as eight centres by the year-end.
“The capex payback period is just 15 months for every Cult centre. And with the 10 centres, we’ve proven the product-market fit—our NPS (net promoter score) is 84, which is insanely good. So we’re getting into serious scale-up mode. We’re following a strategy of hyper-local dense concentration. In each area, we want many centres so half the market of that locality is serviced by Cult," Bansal said.
He added that when CureFit bought Cult last year, it was more “of an experiment but now we’re convinced that in the next five years, we can build a 500-centre business with $250-300 million in revenues and cash flows of $50 million". Bansal said the 10 Cult fitness centres currently operating in Bengaluru generate $10,000 each in monthly revenues.
Bansal, former CEO and co-founder of fashion retailer Myntra, and Ankit Nagori, a former senior leader at Flipkart, started CureFit in March 2016 with $5 million of their own cash. The company then raised $15 million last July in Series A capital from venture capital (VC) firms Kalaari Capital, Accel Partners and IDG Ventures, one of the largest early rounds of funding ever by an Indian start-up. Last month, CureFit received another $3 million from some angel investors and UC-RNT Fund, a joint venture between the University of California and Ratan Tata’s RNT Associates.
The company launched its app last month in Bengaluru. As CureFit wants to be the fitness hub for customers, apart from offering Cult subscriptions, the app also sells health food subscriptions and mental wellness content. CureFit will launch Cult and its app in Delhi in the December quarter.
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“Every Cult user has to use the app every day to book a class. That leads to massive engagement and it’s working really well. We have 5,000 Cult users today and all of them are using the app 3-4 times a week. That becomes a great way for us to showcase our other offerings like food," Bansal said.
While it’s a fitness centre, Cult differs from traditional gyms. For one, it doesn’t have any equipment; it offers exercises such as dance fitness program Zumba, yoga, martial arts and other alternative fitness initiatives that are conducted by some 100 experienced professionals.
“Our secret sauce is our trainers. Most of them are former athletes and they understand physiology, sports science; they know how much to push you and also when to hold back. We’ve also worked on the ambience… people really love the experience," Bansal said.
Cult is adding sports activities at its centres. It has started offering football at one, and will add other sports and expand it to other centres.
“Cult is a trainer-led, group class format. So we’re building with that context. We’re building a couple of extensions to it. One is Cult Sports—the idea is that not everyone is into the workout kind of fitness, so if you prefer sports this is what we enable. We are also working on a product to enable Cult classes in other locations like apartments and offices," Bansal said.