Cult.fit, India’s leading fitness unicorn, has initiated steps to go public with a ₹2,500 Cr ($292 Mn) IPO. The Zomato-backed company has shortlisted Axis Capital, Jefferies, Goldman Sachs, Morgan Stanley, and JM Financial to manage the offering. This IPO is expected to value Cult.fit at $2 Bn, a 28% rise from its last valuation of $1.56 Bn. The startup, founded in 2016 by Mukesh Bansal and Ankit Nagori, provides both digital and offline fitness solutions, including gyms, at-home workouts, and wellness services.
With over $650 Mn in funding from investors such as Zomato, Accel, and Temasek, Cult.fit has aggressively expanded its presence in India through a franchise model. As of now, it operates in 130 locations. The company reported a revenue surge of 33.6% in FY24, reaching ₹926.6 Cr, although its net loss also widened by 42% to ₹888.5 Cr. The IPO aligns with a broader trend of new-age startups going public amid favorable market conditions.
1. Cult.fit’s Business Model and Revenue Streams
Cult.fit operates on a hybrid model, offering both physical fitness centers and digital workout solutions. The startup runs a chain of gyms under its flagship brand while also providing on-demand at-home workout content. Additional revenue streams include:
1.1 Subscription-Based Services Customers pay for membership plans granting access to gyms, group classes, and online workout sessions.
1.2 Health & Wellness Offerings The company has diversified into health-centric services such as Mind.fit for mental wellness and Care.fit for primary healthcare.
1.3 Food & Nutrition Business Eat.fit, a cloud kitchen brand under Cult.fit, caters to health-conscious customers.
1.4 Franchise Model for Expansion To scale rapidly, Cult.fit licenses its brand to franchise partners who operate under its guidelines, generating additional revenue through franchise fees and profit-sharing.
2. Funding History and Growth
2.1 Founders and Early Backing Mukesh Bansal, previously co-founder of Myntra, and Ankit Nagori, former Chief Business Officer at Flipkart, launched Cult.fit in 2016. Their industry expertise attracted major investors early on.
2.2 Major Investors and Funding Rounds The company raised over $650 Mn from Zomato, Accel, Temasek, Chiratae Ventures, and Kalaari Capital. Zomato holds a 6.4% stake, having invested $100 Mn in 2021 when Cult.fit became a unicorn.
2.3 Revenue Growth and Market Expansion Cult.fit reported a 33.6% rise in operating revenue in FY24, reaching ₹926.6 Cr. However, its net loss widened by 42% to ₹888.5 Cr, reflecting high expansion costs.
3. IPO Plans and Financial Strategy
3.1 Bankers Shortlisted for IPO Cult.fit has appointed five banks—Axis Capital, Jefferies, Goldman Sachs, Morgan Stanley, and JM Financial—to lead its IPO process. The offering aims to raise ₹2,500 Cr and value the company at $2 Bn.
3.2 Use of IPO Funds The funds will be deployed to fuel expansion, strengthen digital offerings, and improve operational efficiencies to reduce losses.
3.3 Challenges Ahead Despite rapid growth, the company faces challenges such as high customer acquisition costs, operational expenses, and competition from domestic and global fitness brands.
4. Market Trends and Competitive Landscape
4.1 Growing Demand for Fitness Services Post-pandemic, health consciousness has surged, boosting demand for fitness services. India’s fitness market is expected to grow at a CAGR of 7-10%.
4.2 Competition from Domestic and Global Players Cult.fit competes with brands like Gold’s Gym, Anytime Fitness, and Fitternity, along with global players such as Peloton in the digital space.
4.3 Tech Integration in Fitness AI-driven fitness solutions and wearable tech integration are becoming industry standards, with Cult.fit investing heavily in these areas.
5. Learning for Startups and Entrepreneurs
5.1 Diversification is Key Cult.fit’s expansion into mental wellness, food, and primary healthcare showcases the importance of diversifying revenue streams.
5.2 Franchise Models Enable Rapid Scaling Leveraging franchise partnerships can help startups scale without heavy capital expenditure.
5.3 IPO as a Growth Lever Going public can provide significant capital for expansion, but businesses must have a strong revenue foundation to sustain long-term growth.
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