America is facing an obesity crisis: nearly 40% of all adults in the United States are currently obese, and obesity is the cause of roughly one in five deaths in the U.S. each year. As a result, more and more Americans are committing to healthy lifestyles including balanced nutrition and fitness. The majority of Americans say that they try to eat healthy most of the time, and more Americans than ever are meeting government recommendations for regular exercise. 

The popularity of fitness, particularly among urban Americans, has increased alongside the boom in new workout concepts and exercise studios. SoulCycle, Equinox, OrangeTheory, and Barry’s Bootcamp have become well-known brands catering to young, urban exercisers. The fitness market now tops $100 million globally, and some millennials may pay more for fitness classes than for college tuition in their lifetimes. 

There is clear market demand for innovative, engaging workout concepts that cater directly to millennials and Gen-Zers, who prioritize experiences and sharing visual content with their social media followers. There are several boutique fitness companies that have made millions, even billions, of dollars in the business of making people sweat. What will be the next buzzy workout brand?

GRIT BXING is a boutique fitness studio in New York City offering boxing-focused fitness classes supplemented by advanced workout lighting, music, and a post-sweat liquor bar. As with many boutique fitness studios, customers can sign up for single classes for one-time fees or purchase GRIT memberships for a certain number of classes per month in exchange for a monthly payment. 

Single-class customers or members sign up for a 50-person GRIT class (if the class isn’t sold out) and experience a 50-minute workout centered around treadmill, weights, and boxing, complete with professional-quality club lighting and sound that makes working out feel more like going out. After class, customers can hang out at GRIT’s full bar to sample its healthy and less-healthy recovery drinks like kombucha, cold-brew coffee, kale martinis, and more. 

The GRIT BXING team boasts that its flagship studio in New York City surpassed $1 million in revenue just 97 days after opening and passed $2 million after 196 days. Through just seven months of operations, the gym has managed over 70,000 class registrations. GRIT has also been featured in a number of top-tier publications like People, Fast Company, GQ, and CNBC. 

GRIT has raised $5 million to date from prominent investors like motivational speaker Tony Robbins, globally-popular performing artist Pitbull, and renowned Silicon Valley venture capitalist Tim Draper. Robbins, Pitbull, and Draper are enthusiastic proponents of the GRIT brand, and Pitbull has apparently agreed to promote GRIT to his social media following of over 100 million.

GRIT BXING is led by co-founder and CEO Bill Zanker, a serial entrepreneur with successful exits from multiple companies. Zanker’s previous venture, The Learning Annex, grew to over $100 million in revenue over three years. Two of his other companies, The Great American Backrub and an unnamed online learning company, both went public. 

GRIT has four other leadership team members: COO Christopher Murray, Curriculum Fitness Director Chan Gannaway, Co-Founder Dylan Zanker, and Co-Founder Ediva Zanker. GRIT’s COO has a background in direct-response marketing and has served as a director at four mid-market startups for the last twelve years. Gannaway, who leads the fitness curriculum, was employee #5 at OrangeTheory Fitness and grew the brand to 120 locations across 12 regions in the U.S. and Canada. Dylan and Ediva Zanker, presumably related to CEO Bill Zanker, lead GRIT’s food and beverage and studio customer experience respectively.

GRIT BXING’s near-term growth plans include adding new studio locations and launching an at-home fitness product. For location expansion, GRIT is targeting another studio in New York and an expansion to the West Coast in the Castro district of San Francisco. Beyond those two next locations, GRIT plans to open 10-15 more studios over the next five years. 

GRIT also hints at an at-home digital fitness product presumably modeled after Peloton’s digital fitness membership. Lucy Guo, a GRIT BXING investor and co-founder of $1 billion company Scale.com, will head product development for “GRIT BXING At-Home.” 

GRIT executives are working toward strong EBITDA after year five (approximately 2024), which they hope will position them as a target for acquisition from a leisure or private equity buyer.

• Seasoned team and impressive investors: GRIT BXING is led by a proven entrepreneur, Bill Zanker, and has garnered investment from celebrity personalities and investors like Tony Robbins, Pitbull, and Tim Draper. Companies with proven CEOs and well-connected advisory boards are more likely to realize growth opportunities and position themselves for lucrative acquisition, so GRIT BXING’s roster of talent is an attractive signal for potential investors.

• Demonstrated traction in a lucrative space: GRIT BXING earned its first million in revenue after only three months in operation and exceeded $2 million in revenue within roughly six months. Between those impressive results with the undeniable and growing value of the boutique fitness sector, GRIT BXING is on track to achieve a successful exit, following in the footsteps of similar fitness concepts like SoulCycle and Barry’s Bootcamp.

• Key differentiators within boutique fitness: While boutique fitness is a valuable space with many success stories, most new workout concepts have some way of differentiating from the pack. For GRIT BXING, those differentiators are the club-like workout atmosphere complete with professional lighting and sound as well as the full-service bar attached to the workout studio. GRIT is targeting a consumer that cares about fitness and wants to crush a hard workout but wants to feel like their fitness experience is complete with socialization and fun similar to their weekends. It’s no coincidence that these differentiators are also worthy of Instagram, enabling exponential word-of-mouth spread that has sold out many of GRIT’s classes. 
  

GRIT BXING is a unique, successful boutique workout studio in New York City that is led by successful executives and investors and is ready to expand cross-country to make a name in fitness. The GRIT team seems laser-focused on building an EBITDA-positive business that will generate returns for investors within five to seven years. 

However, investors would be remiss not to consider the impact of the current coronavirus pandemic on the fitness industry. GRIT’s flagship New York studio has been closed in line with the city’s lockdown, and it’s difficult to predict when the facility will reopen. GRIT’s revenue model is wholly tied to retail operations at its NYC studio, so the company will presumably continue to generate zero revenue during the period of closure. Depending on GRIT’s cash position, this closure of indeterminate length could seriously damage the company’s future prospects, or even threaten its existence entirely. 

If GRIT is able to bounce back from its coronavirus closure, though, it will be in a strong position for growth and ultimate acquisition. Barry’s Bootcamp and CorePower Yoga were recently sold or re-sold to private equity firms, and the fitness industry is buzzing with Peloton’s 2019 IPO (the company’s stock price was recently bolstered by revenue from its digital fitness product, which GRIT seeks to emulate) and ClassPass’s $1 billion valuation. GRIT BXING has clearly studied the growth patterns of these fitness concepts, and it is transparent about its goal to be acquired in the next several years. 

GRIT BXING has captured impressive New York City market share with its flagship gym-plus-bar studio, and its plans to add studio locations and launch a digital fitness product will only contribute to the company’s value. While in-person fitness has been hit hard by coronavirus, GRIT hopefully has the investor support and cash on hand to ride out the storm and redouble its efforts to emulate hugely successful fitness predecessors. Therefore, GRIT BXING is a Deal to Watch.