Q1 Featured Founder | SweatPals
The 3rd New Majority founder currently fundraising from YOU this quarter.
Hello New Majority Investors! Find your fitness community with this week’s featured founder, SweatPals!
SweatPals
First, some context:
💪The US fitness industry is massive, worth $32b in 2022 and projected to reach $50b by 2028 (Source: SweatPals).
⛔️Supply side - But there are significant barriers to entry for aspiring fitness entrepreneurs: market fragmentation and the high demand for business acumen. For example, tasks like marketing and management can take up to 70% of working time for fitness “solopreneurs” (Source: SweatPals).
🤷♀️🤔Demand side - For workout newbies or those looking to try a new form of exercise, how do you distinguish between options like a costly gym membership or class passes for specialized workout styles and studios?
🏃♀️🧘♀️Enter SweatPals! SweatPals enables fitness “solopreneurs” to build their business and clientele, while also providing a user-friendly platform for fitness newbies and enthusiasts to find the right workouts, instructors, and communities!
🙌SweatPals’s peer-to-peer based approach transforms fitness into a vehicle for entrepreneurship, community building, and a marketplace.
This company is made for you if:
Meet ups x workout classes x dating apps sounds like ❤️ perfection ❤️
building your own fitness business is on the 🙏 2024 Vision Board 🙏
Tell me more
🏋️♂️🚀SweatPals is building a marketplace for sports and fitness enthusiasts where individuals can find their fitness community or grow their “solopreneur” fitness business. Founded in 2021, they launched in Austin in 2022 and have since launched in Houston and Miami, garnering 40k lifetime active users and $250k in revenue in 2023.
Convinced? Invest today in SweatPals.
The details
Industry:Wellness, E-Commerce
Impact: Good Health and Well-Being (SDG 3), Decent Work and Economic Growth (SDG 8)
Team Diversity: Woman Co-Founder, Minority Founders
HQ: Austin, TX
Company size: 2-10
Year founded: 2022
Key investors: SweatPals has secured investments from the likes of Sweater*, Liquidity (Lit), SUM Ventures, and Antler.
SweatPals won the Barnburner Pitch Competition run by Sweater VC earning a $250K investment which included SUM and Antler as participating VCs.
Sweater’s vision is “to pool money from millions of regular people into a world-class venture fund, wisely deploying that capital into startups that shape the world.”
Antler partners with “exceptional founders across six continents to launch and scale startups that address meaningful opportunities and challenges.”
Liquidity (Lit) “is investing capital into early-stage startups primarily at the Pre-Seed, Seed, and Series A stages. Primarily focused on fintech, consumer, and digital media but always open to evaluation opportunities in other sectors.”
Investment type: SAFE (Future Equity)*
*A SAFE allows an investor to make a cash investment in a company, with rights to receive certain company stock at a later date, in connection with a specific event.
💸 Valuation: $15M (if you invest, you’re betting the company will be worth more than $15M eventually.)
📈 SAFEs are used by early-stage startups because they delay the difficult task of figuring out how much a startup is worth. (Source: Wefunder)
Investor Perks: Your $200 investment gets you quarterly updates and an invite to SweatPals’ annual shareholder meeting, as well as a Founding Partner badge on your SweatPals profile!
Alongside their crowdfunding round, SweatPals has also raised $300,000 from outside investors under the same terms offered in their current Wefunder raise.
Goal: SweatPals has already surpassed their minimum funding goal of $50k, with a max target of $55k.
Deadline: TBD. SweatPals has not yet announced a deadline for their campaign.
Amount Invested: $120,000
Number of Investors: 148
Min investment: $200
Early traction:
💥🏆In 2023, SweatPals won the Barnburner by Sweater VC startup competition where they earned an investment of $250k towards their startup.
🤝Founders Salar and Mandi were both participants in Antler’s 2022 founder cohort. After initial investments, they engaged with the Antler US team in an intensive process to develop their business and get ready for subsequent fundraising rounds.
✍️SweatPals was recently featured in Forbes!
🚀SweatPals has launched in three markets in just 1.5 years: Austin, Miami, and Houston. Within these cities, SweatPals has obtained 40,000 active users, demonstrating clear market interest, and laying the groundwork for nationwide expansion.
🤗🤸♂️SweatPals has capitalized on their community buzz, helping to orchestrate 8,000 events in 450 communities, totaling 83,000 attendees from their community.
Founding team
Salar Shahini (Co-Founder, CEO): Salar immigrated to the US from Iran at age 21 and has over a decade of experience in tech entrepreneurship. Most recently, Salar was CEO and Chairman of StreetScan, which provides data and analytics to cities looking to improve and maximize their transportation infrastructure.
Mandi Zhou (Co-Founder, CPO): Mandi brings a wealth of knowledge in product design and is also the co-founder of the Austin Bouldering Club, which boasts over 2500 members!
Due diligence
Pros:
🔜🌎SweatPals is looking to scale, with plans to launch in 9 additional markets in 2024.
💰🔥Growth on the horizon: SweatPals is projecting $1m in revenue in 2024, following $250k in 2023 and based on a continuing 20% user growth rate per month (consistent with their growth from the past 6 months).
😌✅SweatPals centralizes and simplifies key points of friction for fitness “solopreneurs” and their clients with key features including ticketing, waivers, and group chats built within the SweatPals platform.
🎯The acquisitions of fitness apps like MyFitnessPal, Runtastic, and ClassPass by major health and fitness players like Under Armour, Adidas, and Mindbody have demonstrated the appeal of fitness tech to legacy health, wellness, and fitness companies. SweatPals is positioning themselves to be the next global player with strategic appeal to both individual fitness enthusiasts and business-oriented fitness solopreneurs.
Potential risks:
SweatPals might struggle to connect with customers and acquire new users as they expand into new markets with other established competitors.
🚴♀️Since SweatPals targets both fitness “solopreneurs” and fitness enthusiasts across a wide range of exercise styles, finding market fit may be difficult.
Fitness enthusiasts may already have established loyalty to their existing routine, and SweatPals may be less appealing for the “fitness newbie” segment of the market.
🎢Popular “solopreneurs” could move their communities off of the SweatPals platform as they gain traction, cutting off a significant portion of SweatPals’s revenue stream.
🚨While SweatPals has established themselves in their 3 existing markets, this doesn’t guarantee that they’ll meet ambitious future projections.
💲SweatPals needs a vast number of users to transact on the platform and has not disclosed their unit economics or the revenue split between financial transactions on platform and event partnerships.
🔗⏳As with all venture investments, there's a risk that the company might not secure additional equity financing or decide against converting the securities in such an event. Also, the absence of a liquidity event, like a company sale or IPO, could result in investors indefinitely holding securities that are subject to numerous transfer restrictions. These securities do not grant equity interest, ownership, profit shares, or voting rights, limiting investors' influence over company decisions.
Competitors
The fitness SaaS space is crowded and competitive, with many filling specific niches for running or other fitness communities in cities across the US.
Strava: Strava is a US-based online service that combines exercise tracking with social networking. Initially focusing on outdoor running and cycling via GPS data, it has expanded to include a wide variety of exercises, covering both outdoor and indoor activities.
Runtastic: Runtastic GmbH, an Austrian digital health and fitness firm, was acquired by Adidas on August 5, 2015, for €220 million. In September 2019, Runtastic's channels were transitioned to the Adidas Runtastic brand.
Why Sweatpals:
SweatPals is a marketplace bringing together fitness solopreneurs and a social / discovery platform for those looking for a great workout and community. They have founder-product fit with multiple founding team members leading established fitness-oriented communities, promising traction from just under 40,000 users across 3 cities, and strong value props for both the supply and demand side of their marketplace. In just under 2 years, they’ve brought in over $250k in revenue with projections for $1m this year. They are well positioned to grow in an industry projected to expand from $32b to over $50b by 2028. Lastly, this crowdfunding campaign follows over $1m raised from angels and VCs and complements their community-based marketplace and “whatever your ability, you will find your community” company ethos.
Convinced? Invest today in SweatPals.