In this enthralling episode of the Dealmakers’ Podcast, we delve into the life and times of Philipp Roesch-Schlanderer, the ingenious force behind EGYM, where he has raised close to $400 million from top-tier investors. These investors include Affinity Partners, Mayfair Equity, and Bayern Kapital.
In this episode, you will learn:
- The creation of EGYM, a fitness technology company, aimed at revolutionizing the gym industry and enhancing healthcare
- The recognition of the flawed gym experience and the bridging of the gap between fitness and healthcare
- The initial challenges faced and the harmonization of hardware, software, and subscriptions to accomplish a balanced revenue model
- The utilization of global talent and expertise from teams in India, Israel, and the US contributing to EGYM’s success and rapid expansion
- EGYM’s mission to reform healthcare by reducing costs, improving lives, and promoting preventive lifestyles for millions
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Philipp Roesch-Schlanderer:
Philipp was an unsuccessful gym goer and decided to found eGym in 2010 with the vision to make the gym work for everyone. Prior, he studied Business and Technology Management at Columbia University in New York, LMU Munich, and Aarhus University. eGym combines the latest machine technology, powered by German engineering, with the advantages of connected mobile applications to deliver intuitive and effective workouts with more fun and data-driven member support.
In addition, eGym also supports Corporate Fitness offering easier access to gyms for employees in order to stay fitter, be more productive, and be less absent.
In only a few years of strong growth, eGym developed into one of the major players in the European fitness market, implementing its technology at leading fitness chains and franchises.
Overall, eGym raised over 90 Mio. USD in venture capital from large investors and is now entering the US market.
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Connect with Philipp Roesch-Schlanderer:
Read the Full Transcription of the Interview:
Alejandro Cremades: Um, right, hello everyone and welcome to the dealmakerr show. So today. We have a very exciting founder that is joining us. We’re going to be talking about scaling financing. You know all of the good stuff that we like to hear you know our founder today you know he is say quite inspiring. You know, not only he went from europe to the Us. But then you know so he did his studies there and and now he’ is really you know going on a rocket ship that day you’re all going to very much enjoy listen and hearing about his journey so without farther do let’s welcome our guest today Philip Rush schlander welcome to the show. So born and raised in Germany.
Philip Roesch-Schlanderer: Um, thanks for having me a alexanto.
Alejandro Cremades: Philip so give us a walk through memory lane. How was life growing up there.
Philip Roesch-Schlanderer: Yeah I I was born raised in Germany um, ah played soccer a lot and enjoyed my time and my both parents are entrepreneurs so clearly kind of that always was a bit of kind of my story I always felt that i. I like to challenge rules that in my mind make no sense versus just following rules. Um, and but then I I attended high school and and then then my studies actually brought me to New York city um and that was for me in that moment the most exciting time of my life. I got in touch with and you know the the us taxin ah via a venture capital seminar that I attended at Columbia business school which was helped by 2 adjunct professors who were in their professional life actually vcs and it was really for me the first time that I heard about the term venture capital. And and it really excited me so much that I decided well this is actually where I want to spend my my life and then you know living in New York City my friends ah told me that if you go to a us business school. You have to start wearing your Columbia t-shirts.
Philip Roesch-Schlanderer: Something we don’t do in Germany um, and you also have to go to our ah university’s own gym. So I went to the Columbia gym which is in the basement. Ah at one hundred sixteenth and Broadway um, and and and I didn’t know how to use the gym properly. You know I was one of those users then. That um, would kind of hit the quick start button on card machines even though that has nothing to do with my training goal and and and my and and my body I would do on strength machines something like 3 sets or 15 reps of a random training weight and when I always finished my workout I kind of wondered as a very competitive. Soccer player hey did I win today like what’s my score count of this. Um, and yeah, so that kind of felt to me like wow hey twenty almost twenty percent of America is going to a gym but most of them don’t really know how to work out properly. That’s a big opportunity specifically at the intersection of healthcare. Um, and so yeah, then then I came back from the us and found it together with my high school friend florian who attended Berkeley while I was at Columbia we both came back at the same time and then we founded Egypt.
Alejandro Cremades: Um, now now it’s very interesting this because you know obviously you know you you incubated the problem or you incubated the solution to the problem by you know, having that exposure and seeing you know like the whole gym you know experience and and so forth. But I guess also being in New York city it gives you ah a different perspective. No I mean I’m also european just like you and I remember when I moved to New York city to go after you know my studies and do my master’s degree as well. It opened up so many things and it also gave me the. Idea that anything was possible. How did how did things change for you because I mean obviously the european culture is very much finished school and and become a banker a consultant or a lawyer or a doctor so when especially back then when you started a company. It was 2011 you know it’s not it was it was not that trendy to have a startup now. It’s trendy. You know in Europe. By fact, then it was not decay. So so how do you think that being in New York City opened up, you know your way of thinking.
Philip Roesch-Schlanderer: Yeah, it can’t even overstate how important that time for me was um, like I always tell people when I attach down in New York City kind of and I see everyone running and not walking on the streets. It gives me an additional level of energy that I feel. Um, and just people are so ambitious and that definitely kind of gave me the right spin in life and and I remember very well the conversation with my very dear uncle Peter um, went back in Germany when I told him that I’m going to found a fitness technology company. His comment was. Hey. Boy are you really sure about that I can’t imagine. There’s still something that hasn’t been invented yet.
Alejandro Cremades: Um, that’s that’s that’s that’s unbelievable. You know sometimes you know the things that they that you’re like super surprised and shocked you know I can’t believe this hasn’t been done. You know it’s his. You just got to jump and and go for I Mean in this case is what you did, but.
Philip Roesch-Schlanderer: Yeah.
Alejandro Cremades: But walk us through how was that ah process of of incuating. You know what ended up becoming egypt I mean how how did it came so apparent. You know the idea how did you go about? also.
Philip Roesch-Schlanderer: Yeah, yeah.
Alejandro Cremades: Ah, partnering up with your co-founder that was in California at Berkeley I mean walk us through you know that that sequence of events.
Philip Roesch-Schlanderer: Yeah.
Philip Roesch-Schlanderer: Yeah, so so there was really 2 things. Um I decided that I want to be a tech entrepreneur in New York city and I had this experience at the Columbia gym where I felt wow like so many smart people go here and the experience is broken. So those 2 things came together. Basically I experienced the big problem as a user and I decided fixing such problems is exactly going to be my path. Um, and then I started to dig deeper. Um and I tried to understand like hey. Am I the only one that is not successful in the gym and I realized no, there’s actually lots of people that ask to set Nos not successful and um and kind of I realized kind of there’s basically 3 people going to the gym 3 groups of people. This is super broad. You could go much more into detail but very broadly speaking. There are 3 groups of people. Group 1 are what we call x producers those are people that have a background exercise science or have maybe taken 10 years of pt classes so they just know everything about working out and they are really at just kind of almost renting equipment. Um, they are typically very successful with their workouts. Then there’s the second group of people we call them engaged users and those are another roughly 10% people that don’t know what they’re doing but they’re willing to move mountains with their investments and their engagement so they buy human personal trainers. Um, they have an additional peloton bike at home.
Philip Roesch-Schlanderer: Um, and so they are also ah they have a very high chance of being successful and then there is these 80% which is also the entire growth of the market but now already in the gym roughly 80% of people that have no background in exercise science and don’t know what they’re doing but they’re also not ah you know buying. Human personal training services and so they’ve basically statistically no chance of being successful. Um, and and so I was one of those I didn’t know what I’m doing but I wasn’t in in that in that time I wasn’t even able to afford a personal trainer and so I just did random things. Um. And and so the the conclusion was hey let’s develop technology that provides everyone inside the gym with an experience as if they had access to a human personal Trainer. So the way we thought about it was you walk on the training floor. All the equipment knows you. Just imagine like all the workout machines are robots you walk on the training floor. All the machines know you set up automatically and guide you through an optimal workout based on all the data we know about know about you and your training goal. Um, and so and and and when you finish your workout will provide you with data around how you you know. What we’ve been collecting about you. But more importantly, we’ll provide you with meaningful analyzers on how you’ve been able to improve your health and and that’s a very important point because what I also realized in this kind of scoping phase was that the gym industry could play a major role within.
Philip Roesch-Schlanderer: The transformation of the largest market in the world which is healthcare when you think of the us healthcare care market. It’s right now I think roughly like 18% of gdp. So think about it every dollar spent in the Us economy eighteen cents go on healthcare and more than 50% of that market. Is money spent on chronic conditions. Um, just to give you a number like just muscle skeletal diseases in the us only so that’s like back pain problems with your joints and so on that’s one point three trillion dollars a year um it’s a massive market and how is America. Spending that money. Well it’s spent on you know, ah painkillers massages and oftentimes unnecessary surgeries. But what people should be doing in for example, in the case of back pain is strengthening and lengthening their muscles and get rid of muscle. Imbalances so that’s like the the wheelhouse of gyms. So if we could kind of make sure that the gym works for everyone and you know like you go to a restaurant and afterwards you’re not hungry anymore. Imagine if you go to the gym and afterwards you don’t have back pain anymore then the gym could play a major role. And this huge transformation of healthcare and and so that was basically our ah thesis going into this. We are not. You know the brand for like elite athletes. We are the brand for everyone we fix the gym product and and and then connected to healthcare.
Philip Roesch-Schlanderer: In the meantime we also have products that satisfy expert users but basically the most value will be created if we can make sure everyone can work out successfully and be connected to healthcare so that they would rather work out and live a preventative lifestyle versus you know. Taking painkillers and and and such things.
Alejandro Cremades: Um, you know it’s It’s so important that you are touching on this because I find that you know it’s a very interesting transition that we’re experiencing where you know basically people have been and and and doctors in the Us they’re trained to cure. They’re not really you know by there to prevent.
Philip Roesch-Schlanderer: Yeah, yeah.
Alejandro Cremades: I Guess like if if they were preventing. There will be no business right? But I find that there’s been like a really interesting I Guess a shift in consciousness around the way people think about now taking care about themselves. You know whether it’s sleep whether it’s exercise. So I totally see this now.
Philip Roesch-Schlanderer: Yeah.
Alejandro Cremades: Now I Guess for the people that that are listening. You know to really get it. What ended ended up being the business model of Egen How how did you guys make money.
Philip Roesch-Schlanderer: Yeah, so we have 2 business units 1 is what we call edjumjibtech here. We sell software and connected hardware to gyms to make sure that their product works for everyone and they have a toolbox to manage. The experience. They want to offer digitally to ah members on the training floor. Um, and then our second business model is egen wellpass what we do here is we? Ah, we sell subscriptions to employers that then ah can allow their employees to go to thousands of fitness facilities. And not only have access access to those facilities but actually work ah work out safely and effectively and get back reported the data on an individual basis. Our our most famous kpi here is bioage to all the employees but then also in an aggregated level to the employers. Um, and so that’s kind of our business model. So we we sell a software we sell connected topic to gyms and we sell subscriptions to employers in the corporate wellness space but it all is 1 platform.
Alejandro Cremades: Um, I mean hardware software subscriptions all coming into one I’m sure that that didn’t make it easy when raising money.
Philip Roesch-Schlanderer: Absolutely, especially because we had to had to start with hard work in the meantime like close to 70% of our revenues a subscription but you know that that took time and it was always a plan like that. But at the beginning it was really hard to to explain that to investors. I was actually quite surprised because my thesis is that you know the the rockstar companies of the future have basically ah a stack of technology which starts with connected hardware to capture and to control the user experience and and create a captive audience then have a layer of software. Where you basically create interoperability and scalability and then on top of that you have subscriptions that you kind of basically unlook a huge tan and and and you know the largest companies in the world are exactly kind of operating like this think of Iphone. Capturing the audience and controlling the experience and you know then ios kind of creating scalability and interoperability and then app store basically an unlimited tam. Um, when you think of Tesla connected car automotive is like a 5% ebi um business. But then teslaos creating scalability and and interoperability and now they sell this $15000 autonoma driving update with 100% gros margin and and you can go on like with kindle um, and so on and so on so kind of the largestest companies in the world. All do that mark mark zuckerberg once said that.
Philip Roesch-Schlanderer: The biggest fail of Facebook was not going also into hardware and and so for me, it was obviously that’s the future and I think it’s getting even more clear. Um, when you think of Ai and how incredibly important proprietary data and control of experience will be becoming and so therefore. And but but for beginning like investors follow heuristics makes a ton of sense software is easier than hardware more scalable and so on. But for us the plan always has been to make hardware a very small fraction of revenue but a very important element of kind of creating stickiness. Um. And so in our case, we we sell the connected hardware to really capture the experience inside gym and and and the audience and controlled experience and create proprietary data then with our ejum cloud we have the largest Api platform and the global gym industry that allow us us really to print together. Everyone in the industry and scale our experience to all users. Um, and then now with well past it’s our first subscription on top of all of that where we can sell not just access to gyms but basically making sure that people can consume can consume the gym as we say like a pill. But like we can deliver the workout experience to your employees with 0 variance. Um and and and report back the data and so kind of that’s that’s our business model. It’s been really difficult in the early days when we were basically hundred percent hardware business but we found those visionary contrarian investors that kind of took a leap.
Philip Roesch-Schlanderer: Um, and in the meantime our financials are very different right? because ah, hardware’s small part of the of the business but of the revenues but an important element of the business composition and and so now it’s it’s easier for us to fundraise but also kind of it protect us a little bit because still competitors. That also want to do the same thing wouldn’t have access to money because investors are still a bit shying away from you know, hardware software subscription even though we believe and kind of that’s an important element of the rockstar companies in the future but kind of that’s that’s that’s our story here.
Alejandro Cremades: Um, and how much capital have you guys raised to date Philip.
Philip Roesch-Schlanderer: Um, so ah, we we have raised until like a month ago or so roughly hundred fifty million and now we just raised an additional 225000000 from Miami -based affinity partners
Alejandro Cremades: So for the people that are not good at doing the math. What’s the total there I mean that’s a lot of Zeros Philip and you guys have been racing since 2012 so I mean close to 400000000 since 2012 I mean
Philip Roesch-Schlanderer: Um, yeah, it’s a little bit shy of 400
Alejandro Cremades: Because you guys have been with a company since 2011 I mean in dark years doing a startup art I mean that’s a crazy amount of time. But you guys raised in 48017 18 twenty one and 23 so I mean you’ve seen a lot. You’ve raised. Pre covid you’ve raised post covid you’ have also experienced what it’s like to raise you know now in this macro environment. What have you learned to about raising in different. You know, ah macro environments.
Philip Roesch-Schlanderer: Yeah I mean there, there’s definitely always so so what one of the most important things is we have always built a longer relationship with investors before they make the investment so that they really understand what we’re doing kind of at my venture capitalism in our back in at Columbia I learned that. Oftentimes when investors invest into a company and then they attend the first board meeting. It’s an ohshit meeting because they realized did I really invest into this. Um and I try always try to to ah prevent such an oh shit meeting and really have people only investing that fully understand what we do. That’s kind of our most important principle. We want to have full alignment on where we want to take the company in what direction so that we can make sure that you know we don’t get caught up in internal issues. Um, so that’s the most important thing I would say and that there’s of course also ah you know that the. The notion around peace time and wartime Ceo and and you know when covid happened I had to definitely be a wartime Ceo most of my competitors you know chose to furlough and kind of wait and see I decided to immediately execute a March thirty Twenty Twenty a 25% opex cut. And then don’t furlough my team so I was able to still build stuff that our employers employees and drim operators and drm users alike needed during those difficult times and so we actually kept then the revenues afloat roughly on the same level in 2020 23 1 compared to 192.
Philip Roesch-Schlanderer: Um, and and so we were able to finance my team with the revenues and then when when the lockdowns was over like we kind of grew very very fast page. 22 was a fantastic year two 23 it’s going to be even greater for the first time but will even you know reach epi up profitability while we still grow. You know, ah, 70% plus so that’s ah, ah, kind of now a really nice time I’m definitely now kind of transitioning back to peacetime Ceo and but but kind of to really be fully aware of who you are and and and in what situation you’re in. I think is critical for um, you know going through different phases of of of of our journey now we are able to attract lots of investors kind of based on my our financial profile while in the beginning to attract and investors. To invest into 100% hardware business at the time again right now now hardware is like only 20% or something but but but at the time it was 100% but I was clearly showing the vision of that this will be just kind of an enabler to a much greater business. Um, and so we really needed strong missionaries at the time to invest while now we we actually can look more into you know financial investors that can bring a lot of ah value at ah to the table which is for example in our case with affinity partners.
Philip Roesch-Schlanderer: Totally the case because they’re really deeply integrated into the Us economy and have lots of great relationships there.
Alejandro Cremades: Um, now now what? how how has been to the experience of building a company with like a global you know approach because obviously you have people in Germany you have people in the us. Ah, people in different locations and and building a company like that is not easy because obviously different locations means different cultures even though it’s the same company every ah, every office you know has a different culture a different you know type of um of flavor of it. So how has that been for you guys too.
Philip Roesch-Schlanderer: Yeah.
Philip Roesch-Schlanderer: I think the benefit for us was that my co-founder flourine and I have been living on different continents and have been able to understand that we want like we had this american idea of you know, being very ambitious. Um. Kind of really deeply integrated into our thinking but we founded edrim and so for us it was no question whether we will be global also as a european company you always have to go internationally directly because like every single market is just a fraction of what the us is like um and so one of the first. And most important decisions I think we took was from day one even when we were like a bunch of germans sitting in a small one office room in in Munich was that our company language from day one was only english so there was like a. Like for germans sitting in 1 room speaking only english but what we wanted to achieve is basically from day one is that as long as you speak english we will be able to recruit you if you’re awesome, um, and and and so the german language was never integrated into our culture. And so it was never also a limiting factor. Um, you could argue it maybe also create some positive selection even within Germany for our workforce and but ah, kind of that’s that’s how we’ve set up and in the meantime, many people always say like about us we are the the most american german company that you will find.
Philip Roesch-Schlanderer: And and and and we feel really good about it. We combine you know the being extremely reliable process-driven efficient all that stuff from germany and humble in combination with being extremely innovative and ambitious. Um and optimistic. Which is kind of what we take from America and and bring it all together in one company.
Alejandro Cremades: Um, so let’s let’s let’s double click on on that that you’re just alluding to being ambitious and being optimistic. Let’s say you were to go to sleep tonight Philip and you wake up in a world where the vision of egypt is fully realized. What does that world look like.
Philip Roesch-Schlanderer: In that world and people will say oh since there’s e gym. The gym works for me I’ve gotten rid of my back pain of my kind of I’m the fittest version of myself and um, the best thing is. Now my employer only pays half the money for health insurance because um, we need to spend much less money on all kind of kind of ah painkillers and and massages and and and insulin and and other treatments that are just kind of. Kind of treating the problem versus curing it because all the gyms have become and and got elevated to being the most important partner to healthcare and people every every person in the world goes to twice a week to a gym. It’s going to be just like a 30 minute workout it’s highly effective. It’s. Super safe. The data is clear and invisible to everyone and and we will be dramatictally shrinking the healthcare market increasing quality of life and just people being happier in healthier buddies.
Alejandro Cremades: Um, now we’ve been talking here about the future. So I want to talk about the past because I mean having been pushing this in 2011 gives time for a lot of tears. A lot of sweat a lot of blood that you put into this tool into your baby and a lot of lessons learned. Um, so one. If I was to put you into a time machine and I bring you back in time I bring you back to the moment where you were you know? maybe you know coming out of Columbia business school and.
Philip Roesch-Schlanderer: Um, yeah.
Alejandro Cremades: And figuring you were still in that moment where there was something there that you were exploring that you thought it was exciting. You know a problem there that you were navigating Perhaps you know on on bringing a solution to it and let’s say you’re able to sit down your younger self and you’re able to whisper to your younger self.
Philip Roesch-Schlanderer: Yeah.
Alejandro Cremades: 1 piece of advice before building this company. What would that be and why given what you know now.
Philip Roesch-Schlanderer: So I would say one of the most important things I’ve learned is sequential is faster than in parallel. So for example, when we decided to go international. We launched 4 countries in the same moment. Um, and. I think it would have been much better for us to first launch one country fix it because you know by definition. The gym market is global the vendors of gyms. For example, are globally everywhere exactly the same the gym a gym in Hong Kong fitney New York Munich and Madrid they look all exactly the same. Um and so. It was clear that kind of it’s not that one market works better than the other. It’s just we need to focus on those markets and so I keep telling this my team at the beginning I made those mistakes also at the when but when we race in 2016 for the first time ah quite a bit. Money was like a $45000000 round. We started too many things at the same time. Um, and then we didn’t do these things perfectly. Well and I’ve become now really excited about doing very few things extremely well in an extremely scalable way. Um, and so if I if I could. Turn back to time I would do more kind of division would not change but I would do things more sequentially than in parallel because you know doing first a and then b and then c will kind of that’s my learning at least will get you to.
Philip Roesch-Schlanderer: To completing C faster than if you do a B and C in parallel.
Alejandro Cremades: That’s incredible. So Philip for the people that are listening and that they will have to reach out and say hi. What is the best way for them to do so.
Philip Roesch-Schlanderer: Well, you can you can reach me on ah on Twitter my Twitter handle or now x handle is philiprs ah all 1 works. So Phil I p rs and like school. Um, and that’s probably the best way to reach me.
Alejandro Cremades: Amazing! Well hey Philip thank you so much for being on the dealmaker show today has been an honor to have you with us.
Philip Roesch-Schlanderer: Thank you so much for your time and for the great podcast you’re doing I’m listening to it and almost every week thank you aleto.
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