Obé Co-Founders and Co-CEOs Mark Mullett and Ashley Mills, joins Yahoo Finance Live to discuss how the digital fitness company raised $15M for its personality-driven exercise platform and why they differ from other competitors like Peloton.
- Welcome back to Yahoo Finance Live. As we've been discussing in the pandemic, a number of people have cut cords with their gyms, perhaps out of necessary precautions, and shifted to working out at home. And we've seen a big boom in companies being able to raise money in that environment. The latest example to point to would be Obé fitness, which just closed a $15 million funding round, bringing in money from the likes of some big name investors, including Samsung Electronics, Samsung's Next, as well as Gap's Athleta, and actress comedian Tiffany Haddish as well in the round, backing the company which seeks to combine entertainment and fitness-- "entertrainment," they like to call it.
And bringing on the co-founders and co CEOs of Obé, Mark Mullett and the likes of his co-founder here, Ashley Mills. Mark, appreciate you coming on here to chat. We'll start with you, just because we've seen so many of the companies trying to do what you guys are doing here come up in the last few months. Talk to me about what really separates Obé from the competition in regards to that entertainment piece.
MARK MULLETT: Yeah. Thanks, Zach. Thanks for having us on today. You know, Obé is a premium fitness anywhere content company, broadcasting the best live and on-demand classes to a really engaged community seven days a week.
We're really an "entertrainment" network of sorts, enabled by an incredible technical product that meets our members wherever they are in their fitness journey, on any screen of choice, in any place of choice, and certainly at their time of choice. You know we're obsessed with a variety of movement and providing a variety of classes, inspiring confidence, and infusing an unparalleled fun factor that surprised our audience, you know, throughout the planks and push ups along the way. It's that a fun factor, that "entertrainment" factor, that actually comes from Ashley and I's time as talent agents in the entertainment industry, where our jobs were really to nurture incredible talent, inform pop culture, and certainly, you know, sate large audiences with the most compelling and engaging content. So that fun factor, that variety, and the community really, really set us apart in a currently noisy marketplace.
- Ashley, it feels like fitness, like so many other sectors, have really kind of looking to a hybrid environment, now that people are returning to gyms. And I'm wondering what you're seeing in terms of your subscriptions, those who are coming to your platform. How many of those do you think also have a gym membership? How do you see that behavior, or how people spend their money on fitness, change as things start to open up?
ASHLEY MILLS: So it's certainly an evolving-- it is an evolving fitness customer, if you will. What we're seeing is that, you know, obviously while people are still working out at home, and they are using our product wherever they are, we really are, you know, to Mark's point, a fitness anywhere solution. People are going back to boutique fitness studios and traditional gyms.
And what we're seeing is about half of the folks who came to us during COVID are using Obé as their everything fitness solution. And then, you know, the other half is we are on their fitness buffet. So they might be going to a gym and doing Obé, whatever the case may be.
And so in terms of like how we are approaching this evolving consumer, is really looking at this sort of hybrid user. There's a lot of folks that we've heard from within our membership base who bought a piece of hardware during the pandemic and don't really feel inspired to use it. And so we are creating content for them to use on whatever that piece of hardware is.
That's the great thing about our model. It's very agile. And we can create whatever platform-- or whatever kind of content that we want with sort of the special sauce that makes Obé so unique.
- And Mark, talk about pricing there too. $27 a month, maybe a little bit on the higher end. Some of the offerings out there, $10 a month for Apple Fitness Plus, Peloton for $13. I mean, how do you see that, the pricing competition in the fitness space? Because more people have more options here. How do you look at that?
MARK MULLETT: Yeah. You know, from a pricing perspective, we look at $27 a month or $199 annually as incredible value for the variety and the volume of unlimited content that we provide our members with every single day, both live and on demand. You know, when we first launched Obé about 3 and 1/2 years ago, $27 was the average cost of one studio class across the country.
So we felt like, you know, for the cost of one class, the amount of classes we were giving our audience was really a remarkable deal. And certainly where we live, in New York City, it's closer to $34 a class. So listen, you know, premium matters, brand matters, variety matters. And we know that our audience feels really, really satisfied by the value that we provide at this price point.
- And Ashley, you probably hate getting the Peloton question every time, but there are going to be inevitable-- inevitable comparisons. I mean, I will say, as somebody who uses Peloton, I don't own a bike. I don't have any of the hardware.
But I do like the variety of classes that are there, that I can do it anywhere, and that it is at a pretty low cost, under $20 a month. So is Obé trying to chip away at their market share? Are you looking to bring new customers on board who maybe don't have a subscription in place right now?
ASHLEY MILLS: Well, you know, listen, it really is both. When we think about how we best serve our audience, not that we keep blinders on, we certainly know what's going on in the market, but we focus on what we're best at. And in terms of what we're best at, is providing a best in class "entertrainment" experience, so it's really where entertainment and fitness meet and that is incredible talent, incredible music, the production values, the themed classes that we do with Disney Plus, and HBO Max, and all of these really great partners.
So again it really is about the kind of content that we're able to put out into the world. It's very differentiated. If you looked at our content next to Peloton's it looks and feels very different.
And our approach is a bit of a hide the broccoli approach. And what I mean by that is we want people to fall so in love with movement, and find the joy of movement, that they stay consistent. And I think that's why we have the best engagement in the category. Our average member is taking 14 classes a month, and our top 20% are taking 40 classes a month. So from a content perspective, we're doing a lot right.
- Yeah, that's a lot of active-- that's quite a bit of engagement there. That's a lot of broccoli being found on the platform. But appreciate you guys coming on to share a bit more about it. Obé fitness co-founder and co CEOs, Mark Mullett and Ashley Mills. Appreciate it again.