Philipp Roesch-Schlanderer: EGYM Founder

The $400M Question: Can You Build a Venture-Scale Business in a legacy Industry?

Raising nearly $400 million is a staggering achievement for any founder. Doing it with a complex business that combines hardware, software, and B2B sales into the fitness industry—a sector littered with failed startups—is extraordinary. Yet that’s what Philipp Roesch-Schlanderer, founder of EGYM, accomplished, attracting capital from late-stage powerhouses like Affinity Partners, Mayfair Equity, and Bayern Kapital.

The EGYM story isn’t about a viral app or a simple SaaS tool. It’s a masterclass in solving a deeply-felt user problem with a multi-layered solution that creates a powerful moat. It offers a blueprint for founders tackling complex, capital-intensive challenges, showing how to harmonize different business models to build something truly defensible.

First, Identify a Truly Broken Experience

The core insight behind EGYM wasn’t a new technology; it was a deep understanding of why the traditional gym experience is fundamentally flawed for most people.

Day 1: Intimidation and Confusion. You walk into a space filled with complex machines and no clear starting point. You either guess at weights and settings or pay a premium for a personal trainer. · Day 30: Lack of Progress and Motivation. You’ve been going, but are you getting stronger? Is your form correct? Without data or guided feedback, motivation plummets. · Day 90: Churn. You stop showing up, but the gym keeps charging your card, creating a negative brand association and a business model built on user failure, not success.

EGYM didn’t just try to build a better treadmill. They set out to fix the entire broken system by layering software intelligence on top of physical hardware.

The EGYM Playbook: A Three-Layer Hybrid Model

Most connected fitness companies build one product. EGYM built three integrated businesses, each reinforcing the others: a hardware company, a software company, and a health-tech platform.

Layer 1: The Hardware Moat

EGYM’s foundation is smart, connected strength-training equipment. The machines automatically adjust to each user, set the right weight, and guide their form. This isn’t a feature; it’s a foundational piece of infrastructure.

The non-obvious insight: Hardware is expensive and slow, but it creates a powerful physical footprint inside a gym. Once a gym invests six figures in EGYM equipment, their switching cost is immense. This makes the customer relationship incredibly sticky, paving the way for high-margin software sales.

Layer 2: The Software Engine

The hardware gets the customer in the door, but the software keeps them. EGYM’s software works for both the gym member and the gym owner.

For members: An app that logs every workout, shows progress, gamifies the experience, and builds a personalized training plan. It answers the question, "Is this working?" · For gym owners: A dashboard that provides data on machine utilization, member engagement, and retention. It turns an analog business into a data-driven operation, justifying the hardware investment with clear ROI metrics.

This software layer is where the recurring revenue lives, transforming a one-time equipment sale into a long-term SaaS relationship.

Layer 3: The Healthcare Bridge

This is the most ambitious part of the vision: connecting the world of fitness with the world of healthcare. EGYM’s platform is designed to provide anonymized, aggregated data to insurance companies and corporate wellness programs to prove that preventative fitness reduces healthcare costs.

This transforms the conversation from a "nice to have" wellness perk into a "must-have" cost-control tool for the largest payers in the economy. It’s the key to unlocking a truly massive market beyond just gym memberships.

Common Founder Mistake: Selling a Product, Not an ROI Model

Where most hardware founders go wrong is focusing on the technology, not the business case for their customer. Gyms don't buy equipment; they buy member retention and revenue.

A common mistake is pitching features. A gym owner doesn't care about your torque sensor; they care about a 12-month payback period on their investment. You have to speak their language.

To sell a high-CapEx product to a legacy business, your pitch needs to be a financial model. For example:

Investment: "$100,000 for the EGYM smart circuit." · Return #1: "Our data shows you can charge a $20/month premium for access, generating $X in new revenue." · Return #2: "Gyms with our equipment see a 15% reduction in first-year member churn." · Return #3: "Our software reduces the need for floor trainers by Y hours, saving $Z in payroll."

Without this clear, numbers-driven ROI, you’re just another expensive piece of metal.

From VC to Growth Equity: The Playbook for Raising $100M+

Raising a seed or Series A round is about selling a vision. Raising hundreds of millions from growth equity firms like Affinity Partners and Mayfair Equity is about proving a predictable, scalable business machine. The mindset and metrics are completely different.

1. Shift from Growth to Unit Economics

Early-stage investors forgive messy unit economics in the name of growth. Late-stage investors don't. You need to prove you have a repeatable, profitable playbook.

What this means: You must know your numbers cold. Not just CAC and LTV, but hardware gross margin, software attachment rate, net revenue retention (NRR) for your SaaS product, and the payback period for your customers' investment. · The goal: Show that for every $1 you put into sales and marketing, you get more than $1 back in profit over a defined period.

2. Build a Global Story

EGYM’s use of global teams in India, Israel, and the US wasn't just a cost-saving measure; it was a signal to investors that the company could operate and scale internationally. To justify a multi-billion dollar valuation, your market can’t just be one country. You need to show a clear plan for international expansion and, ideally, have early proof points of that strategy working.

3. Frame the Vision Around Market Transformation

Late-stage investors want to back market leaders who are not just participating in a market but actively reshaping it. EGYM’s "fitness to healthcare" vision was critical. It framed the company not as a seller of gym equipment, but as a preventative health platform with a TAM in the trillions.

You must articulate how you will move from your core business today to a dominant platform position tomorrow.

How to Apply This This Week: 3 Actionable Steps

Map Your Own Hybrid Model. Even if you are a pure SaaS company, what are your "hardware," "software," and "bridge" layers? What part of your business is the sticky, high-switching-cost "moat"? What is the recurring "engine"? And what is the ambitious "bridge" to a much larger market? · Audit Your User Experience for Flaws. Identify the specific points of confusion, frustration, or abandonment in your customer journey. Don't just build features; build a solution that fixes a broken system. Where do your users get stuck, and how can you build a product that guarantees their success? · Draft a B2B ROI Pitch. If you sell to businesses, write a one-paragraph pitch that completely ignores your product's features and focuses exclusively on the financial ROI. How does your product make them money, save them money, or reduce their risk? Frame it in dollars and months.