Former South Beach Club Owner Raises $20 Million For Fitness Streaming Concept
A 34-year-old former nightclub owner recently closed on a $4 million round of funding for a fitness startup. It brings the total he has raised to $20 million, and he has yet to even truly prove his concept.
His name is Nathan Forster and he was first a professional tennis player before owning and operating DEK23 Nightclub and BED Nightclub in South Beach. More recently, Forster has been spending his time raising seed capital and preparing to launch a platform in another industry — fitness and wellness.
Forster’s first company in the space was called RhinoCo, which opened a CrossFit studio in Miami Beach in 2010. Today, he is in the process of creating a new ecosystem for fitness trainers and concepts called NEO U. It basically revolves around the distribution of streamed instructional videos taught by Instagram talent and fitness professionals for consumers to watch at their gyms and on the go.
“I saw that the window was there, but no one was actually creating a platform where the content will live,” says Forster. “I saw that as the next phase of what will happen digitally.”
The NEO U platform is launching in September, but is already in the process of signing influencers and big brands, including Aoki Bootcamp, a workout program started by DJ and producer Steve Aoki.
Investors in NEO U include Nokia Technologies president Gregory Lee and Fresh Direct founder Jason Ackerman.
“Raising money as a venture startup as an idea before proof of concept is probably the hardest thing to do in the space,” admits Forster. “I was able to piggyback on Peloton and ClassPass and Aptiv.”
Peloton recently secured $550 in Series F funding and is rumored to be worth in excess of $4 billion. Forster believes he is able to easily differentiate his startup from what Peloton offers.
“Peloton is very focused on Peloton,” says Forster. “We are like Netflix or Amazon with amazing trainers everywhere, but they don’t have the ability to scale the content. We will shoot their concept and our content.”
NEO U will be built as a revenue sharing system. It will bear a subscription cost for the consumer to have access to content. A pooling system will shave some money off the top for NEO U, and the rest of the revenue goes to the trainers and concepts connecting with the consumers. The back-end of the platform is being built to analyze the minutes spent by consumers on each concept or trainer and to use a formula to then divide the overall revenue after NEO U’s share.
In the meantime, Forster is operating a 20,000 square foot facility on 5th Ave. in New York. People are paying $35 to drop into a live class that will also be available on demand once the streaming service is live. It will launch with over 50 classes to view.