Peerfit, an enterprise health company, has picked up $8 million in a round led by Ark Applications and PAR, Inc. Other investors in the round included Boston Celtics’ owner Wyc Grousbeck and his own investment group Causeway Media Partners. Peerfit previously raised a $10.3 million Series B in January 2018. Its latest capital infusion brings the company’s aggregate known funding to more than $23 million, according to the company.
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Unlike ClassPass, which has primarily focused on providing individuals with flexible access to various gyms and studios, Tampa-based Peerfit’s business model is focused on connecting studios to companies with wellness dollars to spend. Founder and CEO Ed Buckley, who holds a doctorate in Digital Health Behavior, told Crunchbase News that Peerfit’s initial approach was fueled by a desire for companies to spend their wellness dollars more effectively and to tap into the attractive nature of group fitness.
“We thought that the consumer world can be very messy. It can be very costly, and frankly it’s a very difficult thing to be able to change behavior that way,” Buckley told Crunchbase News.
Further, Buckley believes that Peerfit is a better advocate for studios, creating a more cost-effective model than ClassPass, which has struggled to monetize effectively.
“We didn’t want to be a derivative of Groupon, kind of like ClassPass is. Their value prop is that it’s a cheap pass, but when it’s cheap that means that it’s a cheap reimbursement to studios,” Buckley explained.
Rather than depending on the individual and requiring companies to fill reimbursements for a service that may potentially not be used, Peerfit partners directly with insurance companies and employers. The company holds the funds and “doles them out” to studios and gyms as employees choose and use the services.
“We get [employers] to directly pay, and we use our mechanism to both transfer money one way across the bridge [to studios] and then use that data to come back the other way and help inform employers and carriers about what their people are doing and the trends that we’re seeing out there,” Buckley explained.
And while the company began exclusively connecting companies to boutique studios with fitness classes, Buckley said that Peerfit now allows employees to sign up for day passes to gyms as well as gym memberships. The company integrates with the popular studio app Mindbody, and it provides employers with engagement insights on what kind of classes employees are attending and how often.
Peerfit is now operational in 46 states, including in cities like San Francisco and New York, and works with just under 5,000 studios nationwide. The company currently has a headcount of 70 with plans to expand with its latest round.
“You’re going to see some transformative changes [not only] in where the product is being used, but how the product is being used, and moving from just employers and carriers, to really interesting partners and organizations that will be working with Peerfit,” Buckley said.
In the race to make going to the gym more flexible for individuals, Peerfit is taking a unique approach to the industry. Where ClassPass has struggled to find a good pricing model for individuals, Peerfit is hoping that providing a full enterprise health service to employers will put it in first place.
Illustration Credit: Li Anne Dias
Editorial Note: A previous version of the article stated that ClassPass has “zeroed in on” individual memberships. The company does have a corporate wellness program.