Mukesh Bansal: The equity of fitness

There are few entrepreneurs who attract the same investors time after time, no matter what the business. Mukesh Bansal is one of the few. From his first entrepreneurial venture, Myntra, in 2007, to his latest healthcare and wellness startup, Cure.fit, launched in 2016, Bansal has a solid core of investors who have stayed with him.

Accel Partners, one of the country’s most high-profile venture capital (VC) funds, has been one of Bansal’s key investors in every single round. “It must be close to nine rounds so far; even I have lost track. I have never done a round without Accel contributing to it,” says Bansal, co-founder, Cure.fit, which has so far raised $44 million (Rs 278 crore approximately) over two rounds in less than two years. “Even the new investors who have come in at Cure.fit, most of them have been brought to the table by Accel,” adds Bansal, who started Cure.fit with ex-colleague and former Flipkart chief business officer Ankit Nagori.

Bansal might have moved far from the world of fashion, but that hasn’t stopped money from pouring in. It’s perhaps because the move into health and fitness is a logical extension of the 42-year-old entrepreneur’s personality. He gets up at 5 a.m. every morning and hits the gym for over an hour with a fitness regime that includes everything from cardio exercises and weights to yoga and meditation. “Fitness is the source of my energy. To run a startup you need a lot of energy and rigour; my daily fitness regime gives me that focus. I can deal with any kind of work stress,” says Bansal. “Our interest in fitness has helped us a lot in building Cure.fit. We are deeply involved in product building because of our passion for fitness and sports. It makes us very handson with the product that we are offering to customers.”

It’s also perhaps an extension of his basic entrepreneurial spirit. The computer science graduate from IIT, Kanpur worked for Silicon Valley startups for eight years before he built one of India’s largest online fashion portals which he sold to Flipkart for $375 million in May 2014. It was the biggest acquisition in the Indian e-commerce space. With a deal that big in the bag, it’s hardly surprising that Cure. fit had closed its first round of investment in September 2016, even though not a single product or service had seen the light of day until then. The other funds that have pumped money into Cure.fit are IDG Ventures and Kalaari Capital, who have also backed Bansal since their first investment in Myntra. UCRNT Fund, a joint venture between Ratan Tata’s RNT Associates and University of California, is also among the new investors. “I worked really closely with Mukesh in Myntra and Flipkart. Therefore, there’s a high level of trust with him. We believe he’ll build an outstanding company and business each time,” says Subrata Mitra, partner at Accel Partners.

It isn’t just well-established VC funds . Bansal has managed to woo. Bollywood actor Hrithik Roshan, Infosys co-founder Kris Gopalakrishnan, and Ratan Tata, chairman of Tata Trusts, are also among the leading angel investors in Bengaluru-based Cure. fit. The flow of funds shows investors’ faith in the founders and their vision to build an integrated healthcare and wellness platform for consumers. His weapon: using a mixed channel strategy of online and offline to provide services in fitness, food, and primary and mental healthcare.

Today the startup has four products under the Cure.fit platform: Cult.fit, a chain of premium fitness centres; Eat.fit, an online health food delivery service; Mind.fit, a provider of online-offline mental health and wellness services such as meditation and yoga; and Care.fit, which provides online-offline services in primary healthcare (to be launched in April in Bengaluru). According to Bansal, India’s curative healthcare market is estimated to be worth about $120 billion and preventive healthcare market at $30 billion across health food, fitness, and wellness. The potential is huge with an annual growth rate of 17%, says Bansal who forecasts that the market will cross $500 billion by 2025.

Bansal spotted the potential early . He did the groundwork for Cure. fit after his departure from Flipkart in March 2016. He joined the Flipkart management team after Myntra’s acquisition, and his resignation later caused quite a buzz in the industry. But Bansal clearly had a plan. So far, his new startup has spent about $2 million across five acquisitions in the fitness, food, and wellness space. Industry experts feel it is smart to buy businesses that are already running well rather than trying to build from scratch.

Acquisitions also give access to existing customers, and in many cases, a capable senior management team. “Acquire them and absorb them. That is an efficient way of achieving growth rather than trying to say that we can create everything on our own through organic means. That’s how you get the management and technical bandwidth,” says Harminder Sahni, founder and managing director of retail consulting firm Wazir Advisors.

In August 2016, Cure.fit acquired Bengaluru-based fitness centre Cult for an undisclosed amount. The rationale: to build a fitness chain business that steered away from traditional gyms. Cult offers a combination of cardio and strength training exercises without using any gym equipment. Three months later, Cure.fit acquired The Tribe, another fitness centre in Bengaluru, which focussed mostly on group training and no-machine exercises. Bansal feels the acquisitions were a good fit for the company. The fitness vertical is now called Cult.fit, which has 30 fitness centres, 25 in Bengaluru and five in Gurugram. By the end of 2018, it plans to have a total of 75 centres. The focus this year is to expand in the National Capital Region (NCR) region and Hyderabad. “At Cult centres, our capital expenditure (capex) recovery is typically in 12 months, so we can rotate the capital multiple times over a five-year period,” says Bansal.

It was only in January 2017 that Bansal and Nagori seriously focussed on Eat.fit, the subscription-based online food delivery service, and launched the service last June. Last year Cure.fit acquired two kitchens: Bengaluru-based Bhukkad and Kristys Kitchen. Eat.fit has three kitchens in Bengaluru serving breakfast, lunch, snacks, and dinner, and clocking about 4,000 orders a day. Two more kitchens are expected to begin by March. This year, the startup plans to launch its subscription-based food delivery service in Hyderabad and Gurugram, says Nagori. The plan is to tap the urban population aged between 25 and 35. “They are either single or double income young individuals, or families, who look for wholesome, nutritious food, but don’t have the time to make it.” But Nagori knows scaling a food business is not easy: “We are a limited menu player and make sure every time we serve that food it tastes exactly the same from last time.”

The business model is not new, and is similar to startups such as Bengaluru-based mobile health company Grow Fit, which prepares and delivers health food; and offers customised dietary plans and nutrition advice online. But experts say there’s enough space in the market. “There is room for multiple players to get started but ultimately the consumer decides. And today’s millennial customer is not swayed by flashy marketing beyond a point. Everyone wants to be fit and in the end will choose the product that works for them,” says K. Ganesh, Bengaluru-based serial entrepreneur and promoter of Grow Fit.

Bansal isn’t worried about scaling at all. His confidence stems from his experience in growing businesses. He began with Myntra as a personalised gifting startup when he returned to India from the U.S. in 2007 and later changed his business model to an online fashion retail venture based in his rented house in a Bengaluru suburb. “In Myntra, it took me a while to realise that things only happen in the long term. But, here I am starting with a long-term mindset from the beginning. Execution and multi-tasking in a competitive environment like e-commerce was a great learning,” says Bansal.

Even as it develops its fitness and food business, Cure.fit is also expanding its services in the mental health and wellness space with its product (Mind.fit) and primary healthcare services product (Care.fit). Last year, the startup acquired a stake in Bengaluru-based mental wellness services provider Seraniti Mental Health founded by Shyam Bhat, a psychiatrist and integrative medicine specialist. “The idea was to develop an offering which would provide a holistic approach to mental health and wellness. The services would be offered in a two-pronged manner: online and offline,” says Bansal.

The online element provides a mental wellness DIY meditation pack, which is offered through the mobile app currently on a free subscription basis. Already, about 1,000 people use the meditation pack every day. On the offline side, the startup has three Mind.fit centres in Bengaluru and is expected to open two more.As part of its wellness plan, last July, Cure.fit acquired Bengaluru-based yoga centre brand a1000yoga for an undisclosed amount.

Bansal and his team are also trying to approach healthcare holistically. So, apart from building a connected healthcare and wellness platform, the startup is also providing primary healthcare services. Care.fit, which is set to launch its services in Bengaluru in April, will be a subscription-based service for primary care, including health checks-ups with general physicians and chronic disease management .

Bansal insists the model is different from existing players such as home healthcare service provider Portea Medical or Practo, an online marketplace for doctor discovery and appointment booking. “We have a subscription-based model that offers health checkups and annual health plans for the customer. There is an ongoing continuity with the same doctor, who will provide medication and also help with the lifestyle changes,” he says .

“We will be like a primary-care hospital. The only difference is that online will be a large part (about 70%) of our customer engagement and interaction.”

As Business grows, Bansal is clear he will not take the franchise route which, he says, dilutes quality. So, the company owns and builds everything, including the fitness centres, kitchens, and primary care clinics. “I think the strategy is great. Usually the franchise model (if done too early in a venture) dilutes what you are trying to build. It is extremely important to ensure that the strategy to achieve that goal is not compromised; till it reaches a certain critical mass,” says Ashish Jhalani, founder of e-commerce consultancy eTailing India .

Cure.fit has a revenue run rate of $15 million and is aiming to clock $200 million in the next two years. Typically, revenue run rate takes a company’s current revenue in a certain period like a month or a quarter and converts it to an annual figure. Consumer Internet companies in India mostly don’t share actual revenues.

Bansal is aware of the risk involved in building multiple businesses at one time. But he’s not unduly concerned. “We are making sure we have a strong team in place for each vertical, so that even with rapid scaling there is no dilution of focus.” His customers, and investors, are convinced. “I am a big consumer of their salads for lunch, and have private conversations with Mukesh on improving my overall fitness. He’s kind of my personal coach for once-in-awhile wellness advice,” says Mitra of Accel Partners .

Additional reporting by Deepti Chaudhary .

( The article was originally published in the February 2018 issue of the magazine. )