As the dust settles on a challenging week for ClassPass in the UK and US, Asia-wide fitness subscription service GuavaPass has raised $5 million in funding.
Led by Singapore-headquartered VC firm Vickers Venture Partners, the round included input from other undisclosed strategic investors.
Launched in 2015, the ClassPass-style platform, which allows consumers to access workouts in cities across Asia and the Middle East, will use the funding to expand into new markets.
“With this round of funding we expect continued and accelerated growth, GuavaPass co-founder and CEO Jeffrey Liu told Deal Street Asia.
“The funds will be used for customer acquisition, new market expansion, product development and community building efforts. We plan to broaden our audience reach and grow our subscriber base multiple-fold,” he added.
As pioneers of the fitness class subscription model, ClassPass has been navigating a challenging landscape of late. With customers still reeling from the news that it will no longer offer unlimited classes, the company is working on damage control, as it tries to claw back profits.
The bold move, which comes after months of controversial price hikes that cost ClassPass 10 percent of its user base, doesn’t bode well for businesses operating under the same model. However, GuavaPass is confident that it has longevity.
“What we’re building in Asia is very unique to Asia, we can tailor the product [for local markets, and]don’t want to create a cookie-cutter solution,” Jeffrey Liu, GuavaPass CEO and co-founder told TechCrunch.
“From our viewpoint, we set out to build a sustainable business [and have]always been careful that we weren’t over subsidizing our product,” GuavaPass President and co-founder Rob Pachter added.
With long terms plans to develop a fitness community, the company which already offers its users educational resources, as well as producing blog posts and newsletters, recently opened its own studio: GuavaLabs, located in Singapore.
The studio, which is being used for a range of different events and product showcases, has been devised as a way to support the community building that it is working on in the digital arena.
“Our objective is to continue our business, it’s only been about 18 months so we’ve barely scratched the surface. I think we’re on track to build a pretty sustainable business in the long-term,” Lui told Tech Crunch.
Elsewhere, KFit, which operates a similar service in Malaysia, is accelerating its expansion after raising $12 million in funding, earlier this year. However, planned expansion will go beyond fitness, with the company planning on implementing new categories, activities, and pricing models, in a bid to increase revenue – a strategy that ClassPass has also hinted at previously.