20 highlights
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In addition to the appointment, Tata Digital is in the process of investing $75 million in Curefit.
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Earlier this month, the Tata group announced the appointment of Mukesh Bansal as the president of Tata Digital.
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This is a strange development for multiple reasons and, as we said, much has gone unexplained. For one, the Curefit investment is being looked at as an important piece in Tata’s super app puzzle and the company’s plan to compete with the likes of Amazon India, Walmart-owned Flipkart and rival Indian conglomerate Reliance Industries. But for a company that has just started to figure out its digital play, investing in what is essentially a fitness/gym chain doesn’t make much sense.
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Before Kunal Shah’s credit card bill payments company CRED came into play, Curefit was the poster boy of highly valued startups from second-time founders with little-understood strategies.
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Third, what does this arrangement mean for the Tata group? And what happens to Curefit, which has already lost one of its two co-founders last year when Nagori split away, along with the food business Eat.fit, and has been struggling with the pandemic?
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The pandemic has been a setback, with the company’s flagship Cult fitness centres suffering, but in another year or so, Curefit is capable of easily fetching a billion-dollar valuation. In that context, how is it that Bansal is now dividing his time between Curefit and Tata Digital?
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Tata has been one of the earliest investors in Curefit.
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Gopalakrishnan and Tata go way back.
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Some of their common bets include eyewear company Lenskart, electric bike rental startup Ampere, analytics firm Crayon Data, baby products brand FirstCry, medical emergency response startup MUrgency Inc. and Curefit.
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But it doesn’t take a lot to conclude that Bansal has been brought on board to whip things into shape and to navigate a younger startup ecosystem that many in the old-school Tata group don’t seem to get.
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In just about 10 days since the announcement of his appointment, Bansal has already joined the board of 1mg, the online pharmacy recently acquired by Tata Digital.
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The idea of Tata’s super app ambition is to 1) invest in and acquire startups that can help the company compete with the giants, and 2) streamline most of its own consumer businesses. Those existing businesses include the clothing chain Westside, jewellery and eyewear company Titan, Croma electronics stores, appliances maker Voltas, insurer Tata AIG and financial services company Tata Capital. And the chaos when it comes to the lack of communication between these companies is remarkable.
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Several of these brands or businesses are publicly listed companies, and answerable to their respective boards, which in some ways restricts them from working towards a common digital play.
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Bansal had founded Myntra in 2007 and built the platform into India’s top fashion e-commerce company—something that even Amazon has struggled with.
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Few startups take the move-fast-and-break-things phenomenon as literally as Curefit has. One way or another, the five-year-old company has been increasingly finding its way through chaos and reorganization.
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The Curefit house of health was built on four pillars: Cult.fit, the chain of fitness studios that drives more than 60% of the company’s business; Eat.fit, the cloud kitchen business; Mind.fit, the mental wellness offering; and Care.fit, the primary healthcare business.
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Everything that is not Cult now falls under the wellness umbrella—Mind.fit, Care.fit (via online consultations), apparel, equipment and footwear.
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This move basically means that Curefit is significantly scaling back on its Care.fit and Mind.fit investments and not banking on them to grow into big revenue generators.
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In almost six months of 2021, Curefit has already acquired three companies and held conversations with quite a few others. The first was a California-based company called Onyx that specializes in body tracking and personal workout feedback. The second is a Mumbai-based fitness aggregator called Fitternity, which would give Curefit access to a network of thousands of gyms across the country that are expected to be co-branded with the Cult name. And the third acquisition marks Curefit’s entry into fitness equipment with a smart fitness bike (think Peloton) being developed by Bengaluru-based Tread.
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On the back of this physical fitness play, Curefit wants to build a business like that of Talwalkars Healthclubs, a publicly traded fitness chain that is now fighting a bankruptcy battle. The pandemic may have done a number on Curefit, but the company is banking on a revival and a health wave as soon as things go back to normal. Cult will be the cash cow of the company, and the wellness and digital ventures are what will justify Curefit’s tech-like valuation.