EGYM: Lessons on Raising $400M for a Hybrid Hardware and Software Startup
EGYM raised nearly $400M by blending smart hardware, SaaS, and a big vision for healthcare. We break down founder Philipp Roesch-Schlanderer's playbook for building a defensible, multi-layered business.
TL;DR: EGYM founder Philipp Roesch-Schlanderer raised ~$400M by fixing a broken gym experience. The key was a hybrid model combining smart hardware, subscription software, and a long-term vision to connect fitness with healthcare, proving that complex, capital-intensive businesses can attract massive investment with the right strategy.
Key takeaways
- Solve a broken user experience with a multi-layered solution.
- Combine hardware, software, and subscriptions for a defensible model.
- Bridge the gap between consumer wellness and B2B healthcare to unlock bigger markets.
- For large funding rounds, shift focus from growth to unit economics and predictability.
- Demonstrate a clear path to market leadership to attract growth-stage investors.
- Leverage global talent to accelerate development and expansion.
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.
Think about the typical gym member journey:
- 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.
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