With a F round of financing of US$360 million, can Keep support a US$2 billion valuation?

Keep shouting "Self-discipline gives me freedom", running on the road of freedom.

At the end of December last year, Keep completed the F round of 360 million US dollars of financing. This round of financing was led by the SoftBank Vision Fund. Hillhouse Capital and Kotu Capital followed suit. It has become the largest amount of domestic sports technology financing in recent years. Keep has a successful valuation. The US$2 billion mark is doubled from the US$1 billion valuation in the last round of financing.

Thousands of fitness software, why keep out of the siege? After the financing was completed, rumors about Keep taking an IPO were also uproarious, but is Keep really worth the valuation of capital?

Can the leading technology sports track keep up with such a high valuation?

On the eve of the Spring Festival in 2015, Keep went online quietly. But no one thought that this main fitness software could become the biggest dark horse of the year. Within three months, the number of Keep users rose from 4,000 to 2 million. That year, Keep was not only shortlisted in the annual selection of Apple’s App Store, but also became a pre-installed application for all iPhone showcases in Greater China.

Correspondingly, Keep has a brilliant financing history. Since its launch on February 4, 2015, Keep has accumulated 8 rounds of financing and obtained more than $600 million. GGV, Tencent, Wuyuan Capital, Times Capital and BAI Capital are all its old shareholders.

So, how did the fitness app keep win the favor of capital?

(1) Rapid development of performance, becoming a top player in fitness applications. In recent years, thanks to online high-quality content, Keep has ushered in rapid growth in performance. In 2019, the annual revenue of Keep's online business increased by 286% year-on-year, and the offline consumer goods business also grew steadily with a revenue growth of 300%. In addition, the number of Keep App users has exceeded 300 million, the number of members has exceeded 10 million, and the number of self-developed training courses has exceeded 1,200.

(2) Product diversification, keep is more than just selling courses. Compared to other fitness apps, Keep's ambition is never the class. The four scenarios of "eating, wearing, using and practicing" have been covered by users. In addition to selling courses online, Keep also sells goods online. From clothing to food, from smart hardware to functional fitness equipment, Keep does not let go.

After this round of financing, Keep will also iteratively upgrade smart hardware such as treadmills and sports bracelets in 2021. Consumer goods businesses such as smart spinning bikes and healthy food will continue to be the focus of Keep's commercialization.

(3) The enthusiasm of the home fitness scene directly drives the growth of Keep users. This is also the reason for the rapid increase in valuation in this round of financing. This year, home fitness-related industries have soared, and keep has become the leader in technology fitness. At the same time, its revenue pillar consumer goods business has also achieved good growth. , The current annual sales are in the order of 1 billion yuan.

But keep is not worry-free. While gaining the favor of capital, the industry also frequently asks whether Keep can really support such a high valuation?

Although Keep has formed a multi-mode operating system such as membership system, e-commerce, live lessons, and smart hardware, Keep’s income sources are still relatively thin, mainly from online content payments, e-commerce, and offline hardware, There are two parts of the store, and more or less some problems have been exposed.

Content payment mainly comes from member value-added services. Becoming a keep member can watch intensive videos and essential courses guided by professional coaches, as well as get private customized smart training plans. Calculated based on the minimum membership fee of 9 yuan in the first month, this part of the business has also brought more than 100 million yuan in revenue to Keep.

But even so, the penetration rate of keep members is still very low, and most importantly, this is not only reflected in the penetration rate, but also in the gap between China's fitness market and foreign countries.

Data show that by 2020, my country's fitness market will reach 123 billion yuan. However, the penetration rate of a market with a scale of 100 billion yuan is less than 1%. According to the "Sports Fitness Crowd Portrait Report" of the State General Administration of Sports, my country's fitness penetration rate is nearly three times behind the world. The overall national fitness awareness is not enough, and these are not awakened. The talent is keep’s biggest enemy.

The revenue of the mall mainly comes from the consumer products under the Keep mall . This part of the revenue is also Keep’s cash cow. The relevant data shows that the annual sales of Keep sports consumer products have increased by 100% annually, and the annual sales are in the order of 1 billion yuan. Thousands of yoga mats and meal replacement products should not be underestimated.

But the mall also has its troubles. On the one hand, the price is too high . Take meal replacement products as an example. There are a wide variety of meal replacement products on Taobao, and the prices are relatively low, while the meal replacement products on keep often have thousands of them, and the price gap is obvious. On the other hand, traffic is basically converging on large e-commerce platforms, and vertical e-commerce is not easy to do. Keep wanting to rely on this mall to maintain stable profitability is not that simple.

In addition to this is offline fitness income . In addition to online, Keep has also extended offline, opening an offline gym Keepland. In terms of commercialization, Keep's self-developed sports products sell well, and they have launched Keep C1 family smart spinning bikes and other star products. During Tmall Double Eleven in 2020, bicycle products will rank first in sales of similar products.

However, during this year’s epidemic, the gym was subject to epidemic prevention and control measures, and it has not been able to operate for a long time. While income has dropped sharply, it has to pay fixed expenses such as high equipment and rent. Gyms are at risk. Keepland is no exception, and this is also very significant It hinders the development of keep offline.

Member’s payment rate is low, shopping mall product prices are too high, offline gym expansion has encountered the epidemic black swan, although keep standing on the front line of online fitness, but the challenges are still severe.

The community atmosphere is diluted, keep forgetting the original intention?

In the matter of fitness, keep is not sloppy. Keep shouting "Self-discipline gives me freedom", while breaking the circle, he is also taking on severe challenges.

There are many fitness sports apps in China, but why keep leading the way? In fact, for fitness sports apps, it is superficially compared to the breadth and depth of the content, but in fact, the content is only the basics. What really allows users to stick to is the community culture behind it, and this is the secret to keep succeeding. .

But as Keep continues to grow, it seems to have lost its original intention. Products are getting heavier and heavier, more and more businesses, and less and less high-quality content, and the community atmosphere is constantly being diluted.

Over the years, Keep has successively launched KeepKit smart hardware, Keepland sports space, KeepLite light food, KeepUp trendy clothing and other business lines. Open the Keep software, it is crowded with shopping malls, light food, hardware, Keepland and other tabs. Click on each category again to unfold more subcategories one after another, which dazzles consumers.

It looks like the pile of plates is huge, but it is not helpful . At present, Keep's monthly life is not high, but the user's use time has decreased. According to data from third-party QuestMobile, Keep's monthly active life was only 21.91 million in May 2019, which is about one-tenth of the total number of users.

And the former employees of Keep also broke the news in the article "The Dilemma and End of Keep" that Keep’s user usage time has fallen back to the level of 2016, and the user’s usage time has dropped, which precisely shows that the products and services of the product itself are important to users. The attractiveness drops.

From tools to platforms, Keep rudely mixes courses, communities, and e-commerce, as if to rush to tell a story to the capital, but forgot to keep its feet on the ground. With so many businesses and so many complex scenarios, it is easy for a team with less than a thousand people to start a business for five years.

In addition to the dilution of the community atmosphere, Keep has another worry. With the rise of online fitness, the model of online fitness has become familiar to more users. Although the online fitness model gives users and coaches more space in time and space, it does not apply to every fitness user.

After all, human self-control is limited, and there are still a few users who can do home fitness without any distractions. Such a business model is also anti-human. So how will keep in the future deal with it?

How to deal with Keep's future?

So far, keep has built a whole fitness service chain and has become the absolute top player in the fitness application market, but the crisis is quietly coming.

The online fitness track where Keep is located has continued to be hot. Gudong, Xiaomi Sports, Super Gorilla, and Leke are all head companies that have been in the sports field for many years, and their strength should not be underestimated.

In addition, Internet giants are also eyeing. Douyin, Kuaishou, and comprehensive content platforms such as Station B and Xiaohongshu have also increased the proportion of fitness content. Station B launched the "bilibili gym" event, and set up a series of bonus pools to motivate creators to produce content.

And Douyin has also launched a two-week "Tik Tok Online Gym", which is taught by entertainment stars, Olympic champions and fitness experts for free. In addition, the mobile phone giant Apple has officially entered sports content. Apple has already launched the paid fitness content service Apple Fitness+ in some countries, which is obviously well prepared.

In addition, Peloton, a spinning bike and treadmill brand that focuses on the family scene, has a market value of 6 times this year; Nike's online fitness application Nike Training Club launched a fitness program suitable for small spaces at the beginning of the year; industry participants continue to increase .

With the increase of sub-healthy population and the improvement of people's awareness of maintenance, the fitness market has developed rapidly in recent years. According to data from Santi Cloud, in 2020, there will be 109 financings in the global fitness sector, and more than half of the projects involving the Internet and intelligence. The home scene is particularly eye-catching.

But keep did not sit still, constantly optimizing online content, in order to consolidate its own moat.

(1) Introduce Internet celebrities to enrich overseas courses. Internet celebrity fitness experts can enhance the stickiness of the platform, and high-quality courses can enhance the competitiveness of keep. This is also the direction of Keep’s focus in 2020. For this reason, Keep not only introduces super sports experts such as Pamela and Saturday Wild, but also introduces overseas content IP such as Zumba and Laimei, and continues to optimize online sports content for family sports. The crowd provides one-stop sports solutions.

(2) With the help of live broadcast Dongfeng, Keep opened live fitness classes. Live broadcast is the highlight of this year, and keep has not missed it. Since this year, Keep has established a live broadcast interactive team of nearly 100 people including course designers, live broadcast coaches, and brokerage operations. Aiming at the new career of live coaching, Keep launched a long-term training plan and established an integrated development path.

Through half a year of development, Keep’s live coaching team has attracted millions of fans. A live broadcast can sell 180,000 barrels of konjac flour, and Keep’s live broadcast continues to shine.

According to data from the 2020 China Sports Industry Summit, more than 75% of the fitness population in my country is using online fitness apps, of which the ratio of following video exercises and clocking in at home accounts for more than 90%. It can be seen that the home fitness scene is obviously a big cake that grows rapidly at a speed visible to the naked eye.

With the development of live courses and the introduction of content IP and talents, Keep’s prospects are bright, but how to keep the same taste while breaking the circle and maintain a unique community atmosphere requires continuous thinking by Keep.

Author: rather lack

Article source: Songguo Finance, please indicate the copyright for reprinting.

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