Mukesh Bansal's Cult.fit raises $10.2M led by exiting investors

Cult.fit, a health and fitness startup, has reportedly raised Rs 84.5 crore (approximately $10.2 million) in a funding round led by existing backer Valecha Investments, which injected over Rs 36 crore.

Other notable participants included Gul Advani of Sun-n-Sand Hotels with Rs 28.26 crore, alongside investments from Extreme Brands LLP, L&K Wellness Services, and a group of individual investors.

Passing the resolution

The board at Cult.fit has passed special resolutions to issue 1,55,080 equity shares to Extreme Brands LLP and 15,92,157 Series C compulsory convertible preference shares (CCPS) to other investors at an issue price of Rs 483.62 per share to raise Rs 84.5 crore, as per the company’s regulatory filings with the Registrar of Companies.

Transitioning to an offline-focused model

Cult.fit, founded in 2016 by Mukesh Bansal and Ankit Nagori, is transitioning from a tech-first gym chain to a more offline-focused model. The startup plans to open more physical centers across the country.

Its offerings span from group workouts at Cult.fit centers to gym- and equipment-based workouts at partner facilities, and online training, catering to a wide range of fitness enthusiasts.

How well is it performing financially?

The startup's operating revenue witnessed a substantial increase, more than tripling to Rs 694 crore in FY23 from Rs 216 crore in FY22.

Notably, Cult.fit managed to narrow its losses to Rs 551 crore in FY23 from Rs 688 crore the previous year.

Despite the revenue upturn, Cult.fit has also been mindful of its expenses. Employee benefits, which represent the largest cost center for the company, increased by 17.5% to Rs 343 crore. This figure includes Rs 86.3 crore as a non-cash expense for Employee Stock Option Plans (ESOPs).

Other costs, including material consumption, advertising, IT, commissions, and legal fees, pushed the total expenditure to Rs 1493 crore, a 50.2% increase from the previous year.