WEBVTT - Obé Fitness Nabs Backing from Samsung, Athleta

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well. Obey

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<v Speaker 1>is a twenty seven dollar a month fitness platform that

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<v Speaker 1>counts Drew Barrymore and Kate Hudson as members, and it

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<v Speaker 1>just raised fifteen million dollars in funding from investors including Samsung,

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<v Speaker 1>Next and Athleta from Gap. That value is the startup

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<v Speaker 1>at about one hundred and ninety million dollars that according

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<v Speaker 1>to people familiar with knowledge of the matter. Joining us

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<v Speaker 1>now are the co founders and co chief executive officers

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<v Speaker 1>of Obey, Mark Millette and Ashley Mills. They're joining us

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<v Speaker 1>on the phone from Brooklyn, Mark, Ashley, Thanks for taking

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<v Speaker 1>the time. How are you doing this afternoon. We're doing great.

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<v Speaker 1>Much for having us, Tim, Yeah, thanks for joining me. Well, actually,

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<v Speaker 1>I want to start with you and talk a little

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<v Speaker 1>bit about the fundraising process here. How difficult was it

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<v Speaker 1>to raise this money from these companies Samsung, Athleta. Other

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<v Speaker 1>participating investors include ww International that's formerly known as Wait Watchers,

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<v Speaker 1>Cabo Venture Partners, Well Use Entertainment, and more. How difficult

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<v Speaker 1>was that to do? During the pandemic. Yeah, it's a

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<v Speaker 1>great question. So we've been very careful UM in the

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<v Speaker 1>history of our company now to sort of over capitalize,

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<v Speaker 1>and so it was a it was a big decision

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<v Speaker 1>for us to go out and raise our Series A. Obviously,

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<v Speaker 1>you know with the pandemic, UM we were growing at

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<v Speaker 1>a very nice clip free pandemic, but the pandemic was

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<v Speaker 1>merely grew four. Yeah, it was. It was a pretty

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<v Speaker 1>wild year to day the least UM and a lot

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<v Speaker 1>of folks have been coming to us for quite some

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<v Speaker 1>time asking its raise and we just we weren't ready.

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<v Speaker 1>And we were obviously super hands down building the business

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<v Speaker 1>that that essentially skilled overnight. UM. So from a fundraising perspective,

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<v Speaker 1>UM that you know, that piece of it was not challenging.

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<v Speaker 1>I think, UM, what was like most exciting for us

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<v Speaker 1>is being able to find the right partner. We really

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<v Speaker 1>believe that you are the company that you keep, and

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<v Speaker 1>so to be able to UM you know, have common

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<v Speaker 1>ventures lead around. They focus on a lot of a

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<v Speaker 1>lot in the health and wellness space UM, and I

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<v Speaker 1>think all of our our new partners really see the

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<v Speaker 1>future of fitness lifestyle in an important way. And then

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<v Speaker 1>to the strategics who joined around so um ww Athleta

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<v Speaker 1>and Samsung. All of those partners we've had relationships with

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<v Speaker 1>for quite some time, for years actually, and in terms

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<v Speaker 1>of various partnerships that we've worked on with that, and

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<v Speaker 1>so it was it was a natural call when we

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<v Speaker 1>when we started to think about fundraising to include them

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<v Speaker 1>in those conversations. And we're absolutely thrilled um with with

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<v Speaker 1>how the rays sort of turned out. We believe that

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<v Speaker 1>Obeys as at the center of the good decisions business

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<v Speaker 1>to right and the good decisions ecosystem, and so we're

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<v Speaker 1>excited um for them to all be involved as we

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<v Speaker 1>build the first of this kind of entertainment network and

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<v Speaker 1>really take on this category that we're calling fitness lives

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<v Speaker 1>out well. So it's so interesting actually you describe it

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<v Speaker 1>as a first of its kind of entertainment network because

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<v Speaker 1>both you and Mark have a background in being talent agents, right,

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<v Speaker 1>having clients and and and being in the talent entertainment business.

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<v Speaker 1>So so Mark, what does mean to have a talent

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<v Speaker 1>entertainment network rather than than having a fitness platform. Yeah,

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<v Speaker 1>you know, absolutely, Tim. When we when we first started Obey,

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<v Speaker 1>our vision was to reinvent um, what what daily movements

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<v Speaker 1>felt like, what it looks like, and what it could

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<v Speaker 1>really provide people at home. So, you know, in our

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<v Speaker 1>old job as as talent agents, with our jobs to

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<v Speaker 1>nurture great talent um and to bring you know, pop

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<v Speaker 1>culture to people everywhere, right, to really create these incredible

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<v Speaker 1>uh mutual experiences around content and get people excited to

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<v Speaker 1>pay depending on their their their niche, tastes and preferences. Um,

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<v Speaker 1>So we started obeying. We thought, wait a minute, fitness

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<v Speaker 1>hasn't been reinvented in a while, right, It's still sort

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<v Speaker 1>of looks the same, it feels the same. It doesn't

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<v Speaker 1>feel topical, it doesn't feel variety, field doesn't feel fun um.

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<v Speaker 1>And so that entertainment pieces really adding that fun factor,

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<v Speaker 1>that topicality. Um Our instructors are the best in the business.

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<v Speaker 1>They're incredible. They are the superhero best friends who motivate

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<v Speaker 1>throughout the workout and hopefully throughout the day. Um, you know,

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<v Speaker 1>transcending screen and jumping right into your living room, your hotel,

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<v Speaker 1>your basement, your office, wherever you're working out with us.

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<v Speaker 1>And so we've also taken it to another level. We've

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<v Speaker 1>partnered with some of the biggest Um, you know, stalwarts

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<v Speaker 1>of the entertainment business such as Disney Plus, NBC, Peacocks, CBS,

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<v Speaker 1>Paramount Um. The list goes on to bring really fun

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<v Speaker 1>pop culture center classes to our audience as well. We've

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<v Speaker 1>had classes with Game of Thrones themes, uh, Sex in

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<v Speaker 1>the City themes, Cruella from from from Disney Plus themes Right.

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<v Speaker 1>So it's really about taking fitness and making sure it's

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<v Speaker 1>not boring, that we can keep you having fun, getting

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<v Speaker 1>the results you want, and hopefully putting a smile on

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<v Speaker 1>your face in the process. Hey, actually, just in the

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<v Speaker 1>last twenty seconds that we have here, and then sit

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<v Speaker 1>tight because we're gonna come back to you, both of

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<v Speaker 1>you after we do some news here. How would you

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<v Speaker 1>describe these classes for people who may be hearing this

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<v Speaker 1>and saying saying, wait a second, this sounds like it's

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<v Speaker 1>it's just watching someone work out on TV and and

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<v Speaker 1>not different from a typical class. Just fifteen seconds here. Yeah,

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<v Speaker 1>it's a great question. So we offer twenty two live

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<v Speaker 1>classes a day so you can work out with with

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<v Speaker 1>all of our members across across the country and across

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<v Speaker 1>the North America. Here needs shouted out in class. You

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<v Speaker 1>can also take one of our twenty different modalities on

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<v Speaker 1>demand across all levels of duration. From a content perfective. Again,

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<v Speaker 1>we have the best in class talent um. It's a

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<v Speaker 1>really fun experience. We think of it as kind of

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<v Speaker 1>a high broccoli approach to fitness. Um. You're going to

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<v Speaker 1>get a really effective workout, but you're also going to

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<v Speaker 1>have a great time during the class. Mark Ashley, I

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<v Speaker 1>I just got a question during the last break from

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<v Speaker 1>somebody who's listening right now in the Bloomberg Network who asks,

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<v Speaker 1>why would I subscribe to this if I have a

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<v Speaker 1>Peloton subscription? Do they have enough content to get people

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<v Speaker 1>to switch? Who wants to take it? Uh? Yeah, I'll

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<v Speaker 1>jump in here, Tim. The answer is we have. We

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<v Speaker 1>have plenty of content, uh for anyone and everyone you

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<v Speaker 1>know for that twenty seven dollars a month or annually.

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<v Speaker 1>We have so much content to save all of your

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<v Speaker 1>fitness needs at any level in the game. Right if

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<v Speaker 1>you're a beginner or if you're a triathlete, we are

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<v Speaker 1>here to to help you to find the results you're

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<v Speaker 1>looking for and hopefully help you make some friends in

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<v Speaker 1>the process. Our community is off the charts, but we

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<v Speaker 1>have over twenty modalities over twenty instructors, again the best

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<v Speaker 1>in the business, and class links from ten minutes all

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<v Speaker 1>the way up to one hour long. So whether you're

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<v Speaker 1>working out for ten minutes, uh, you know, in your

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<v Speaker 1>office with the door closed, or a full hour at home,

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<v Speaker 1>UM with the kids asleep, we really have something for everyone.

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<v Speaker 1>But if Peloton does offer that monthly subscription that you

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<v Speaker 1>can get on the app or you can use on

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<v Speaker 1>an iPad or a computer without actually having one of

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<v Speaker 1>the pieces of equipment, UM, how do you get someone

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<v Speaker 1>to switch Mark? Yeah, you know, I think I think

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<v Speaker 1>the reason that people love Obey in addition to the community,

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<v Speaker 1>in addition to our incredible talent, is the premium nature

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<v Speaker 1>of what we deliver every day. Right Our our content

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<v Speaker 1>is gorgeous, It is so personalized, it is colorful. Our

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<v Speaker 1>signature light box really you know, provides like a music

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<v Speaker 1>video in your own living room when you're working out

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<v Speaker 1>with us. And I think that the premium nature of

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<v Speaker 1>what we do in the variety they're in UM is

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<v Speaker 1>really what our audience UH takes to. You know, We've

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<v Speaker 1>learned from so many people over the years and specifically

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<v Speaker 1>even as we head in this COVID Transition world. For

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<v Speaker 1>over fifty percent of our audience, we are their fitness everything,

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<v Speaker 1>and then for another substantial portion about you know, we

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<v Speaker 1>are a main dish on their fitness buffet. In the

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<v Speaker 1>same way that you don't want to, you know, eat

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<v Speaker 1>the same foods every day, you might not want to

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<v Speaker 1>move the same way every day. And certainly if we

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<v Speaker 1>are your fitness everything, we will keep you moving in

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<v Speaker 1>different ways every day. And if we are on your

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<v Speaker 1>fitness buffet and you're going to the local bar studio

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<v Speaker 1>or local yoga studio as well, uh, we're here to

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<v Speaker 1>get you on those days where you're at home or

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<v Speaker 1>on the go. Hey, Ashley, you mentioned earlier that there

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<v Speaker 1>were four hundred increase in subscriptions. That's correct, right, and

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<v Speaker 1>during the pandemic. Um, how did you how did you

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<v Speaker 1>keep operating during the pandemic because you did also say

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<v Speaker 1>that you were shooting live shows and live classes for

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<v Speaker 1>for your network. Yeah, absolutely so. UM. You know, in

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<v Speaker 1>the very very beginning of the pandemic, um when everything

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<v Speaker 1>when everything hit we um, you know, we basically assembled

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<v Speaker 1>production studios are in our instructors homes. Um. And that

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<v Speaker 1>that went on for you know, obviously several weeks um

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<v Speaker 1>as as the government was figuring out what was what

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<v Speaker 1>the thing about our production is that we it allows

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<v Speaker 1>for social distance. There's not a lot of people, a

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<v Speaker 1>lot of crew members that are needed in the studio

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<v Speaker 1>and some of it can be done remotely and so

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<v Speaker 1>um we were deemed an essential service uh pretty early

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<v Speaker 1>on in the pandemic, so we were able to continue

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<v Speaker 1>to to bring people back into the studio again with

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<v Speaker 1>you know, absolutely adhering to all of the safety precautions.

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<v Speaker 1>Can you talk actually more about the entertainment nature of

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<v Speaker 1>this if you are just joining us, Mark and actually

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<v Speaker 1>our former talent agents who built Obey as an entertainment

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<v Speaker 1>network rather than a fitness platforms. Actually I'm wondering about

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<v Speaker 1>the entertainment aspect to this and the idea as you

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<v Speaker 1>and Mark have been talking about that. There have been

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<v Speaker 1>themed classes in the past, um that have been uh

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<v Speaker 1>you know, theme to Game of Thrones for example. Absolutely,

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<v Speaker 1>so there's certainly those tenthole moments, but I would also, um,

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<v Speaker 1>you know, in talking about our content, I would look

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<v Speaker 1>at it outside of the tenthole moments as well, and

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<v Speaker 1>sort of like our core offering, which are these you know,

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<v Speaker 1>twenty different modalities across a number of different durations. So

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<v Speaker 1>Mark and I we never took our talent agent hats off.

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<v Speaker 1>We you know, when we left the agency business, we

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<v Speaker 1>started looking immediately for who were the really incredible, bulliant personalities,

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<v Speaker 1>who were great storytellers, who could lead our members through

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<v Speaker 1>a class and what should be an emotional journey. And

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<v Speaker 1>so they given for all of our classes that they're

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<v Speaker 1>super effective and you're going to get a great workout.

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<v Speaker 1>And the X factor is the talent in the personality

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<v Speaker 1>and what we call entertainment right, we're entertainment in fitness meat.

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<v Speaker 1>So that is, yes, the talent. It is the beautiful

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<v Speaker 1>set inspired by contemporary artist James Terrell and dance Leaven.

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<v Speaker 1>It is the music um, it is the storytelling. It

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<v Speaker 1>is a topical nature. We do twenty two live class

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<v Speaker 1>of the day and because of that we can address

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<v Speaker 1>what's happening in the world and so in a lot

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<v Speaker 1>of ways, taking a class at Obey um it's going

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<v Speaker 1>to deliver on the same level of entertainment that you

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<v Speaker 1>would get from a television show. But you're you know,

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<v Speaker 1>you're getting a workout during the process. Yeah, what actually

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<v Speaker 1>getting a workout while you're streaming whatever you're watching. That

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<v Speaker 1>would be sounds kind of nice. Hey, Mark, wondering about

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<v Speaker 1>the product pipeline here, are you thinking at all about

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<v Speaker 1>hardware and and getting into the hardware business. I see

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<v Speaker 1>Samsung as a as an investor, the company of course

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<v Speaker 1>known for its hardware. Yeah. Absolutely, so you know the

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<v Speaker 1>the year ahead, and again, one of the reasons that

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<v Speaker 1>we raised was to build out our our good Decisions ecosystem,

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<v Speaker 1>right we see, we see Obey as the center axle

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<v Speaker 1>of that ecosystem. So it's not just about the push

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<v Speaker 1>ups and the planks. It's about what you eat, what

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<v Speaker 1>you wear, who you connect with, uh, your mindful level

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<v Speaker 1>of mindfulness, tell you sleep, etcetera. On the hardware front,

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<v Speaker 1>to date, we have required little to no equipment. When

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<v Speaker 1>I say a little to know, I mean workouts that

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<v Speaker 1>are body weight only all the way up to workouts

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<v Speaker 1>that require maybe some you know, handweights or resistance bands.

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<v Speaker 1>On the hardware front, we've heard from a lot of

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<v Speaker 1>our members that they have purchased hardware during the pandemic,

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<v Speaker 1>and frankly, they're not always feeling that inspired to use it.

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<v Speaker 1>So we are beginning to explore you know, how our content,

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<v Speaker 1>how our premium content and our specific point of view

0:11:27.960 --> 0:11:31.680
<v Speaker 1>could translate into you know, heavier gym equipment and hardware

0:11:31.679 --> 0:11:35.200
<v Speaker 1>related verticals. On the electronics front, our goal is to

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<v Speaker 1>be the leader and fitness lifestyle for all people in

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<v Speaker 1>all places, across all screens, and that includes wearables. So

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<v Speaker 1>right now we're we're digging deep into our wearable strategy

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<v Speaker 1>and we can't wait to uh to get that out

0:11:47.280 --> 0:11:49.719
<v Speaker 1>to our audience as soon as possible. In a very

0:11:49.800 --> 0:11:51.880
<v Speaker 1>obey way, of course, I actually want to give you

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<v Speaker 1>the last word, give us a few more details on

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<v Speaker 1>the wearable strategy just fifteen seconds. Absolutely so um you

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<v Speaker 1>know where most people wear a wearable UM and we're

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<v Speaker 1>excited to be able to track our members in class

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<v Speaker 1>UM and also in their their daily life. Starting to

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<v Speaker 1>make sense why Samsung is an investor in the company.

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<v Speaker 1>Mark Mollette and Ashley Mills co founders of the fitness

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<v Speaker 1>platform entertainment platform oh Bay. They're also co CEOs of

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<v Speaker 1>the company. Joining me on the phone from Brooklyn, New York,