PayAsUGym - why we invested
AlbionVC recently led a £6.5 million Series A investment round into PayAsUGym (“PAUG”), the online fitness marketplace, alongside existing co-investors Concentric, Channel 4 and individual angels. Since our original seed investment in 2014 PAUG has gone through a number of product iterations and has now reached the point of validation which any early stage investor, entrepreneur or advisor will be familiar with – product-market fit.
PAUG enables gym users to visit a wide range of health and fitness clubs in a flexible way either with passes or subscribing on a monthly basis with no joining fee or minimum term. PAUG customers are typically people who need flexibility in their relationship with gyms/fitness venues, are members of a gym near home but also wish to use a gym near work (or vice versa), are away on business, are trialling various gyms or who only want to visit a club occasionally or for a limited period.
Gyms are provided with a more economical way to compete for ‘undecided’ or non-brand customers online, providing them with incremental revenue, greater customer footfall, and access insight to improve their proposition and compete more effectively with local competitor clubs.
Flexibility and growth
Fitness market dynamics have been changing over the last 10 years, driven largely by the growing group of gym users who want more flexible access to fitness facilities and search online for gym membership, passes and classes. Societal trends have encouraged more active lifestyles and the digital world has enabled customers to obtain better value for money than traditionally possible.
Not only is the market changing, it’s growing. The sector has grown its penetration of the UK adult population holding a fitness membership every year since 2008 and in 2018 reached 15% penetration (9.9m members) who have access to over 7,000 gyms and studios. 1 in every 7 in the UK is a member of a gym. This trend is expected to continue. Existing operators have shown that they do not have the in-house skills to market online to these customers, an opportunity which PAUG has seized, building an online marketplace with access to significant gym/venue supply.
A key element of PAUG’s recent success has been the scaling of gym supply. The job isn’t yet done and growing the network remains a central element of the growth strategy going forward. The current estate has c. 2,200 fitness venues on the platform, representing 32% of all UK venues and provides access to a broad range of gym-based experiences from basic workouts through to luxury spa-quality facilities. The geographic coverage is good with at least one venue in 96.0% of all UK postcode districts.
PAUG is well placed at the centre of a fitness market which is changing, driven largely by technology and PUAG’s marketplace is offering customers a more flexible way of accessing fitness venues across the UK. Jamie and Neil are building an exceptional team, and we’re excited to support them through the next phase of growth with the Series A investment being used to build out the team, further enhance the product and grow the customer base and gym network.