Helix Fitness’s current raise has a pre-money valuation of $28 million. With $4 million in 2020 revenue, Helix Fitness yields a revenue-to-valuation multiple of 7x. This multiple is appropriate when compared to major competitors. Industry leader Peloton Interactive is publicly traded at a 10x revenue multiple as of August 2021, and Mirror yielded a 5x multiple when it was acquired by Lululemon. Helix’s 7x multiple falls neatly between these two comparisons. Furthermore, a $28 million valuation is also reasonable when compared to other growth stage startups currently seeking capital. As a result, the company’s price rating is its highest across all five metrics.

The global connected fitness equipment market was valued at $255.7 million in 2020. It is expected to grow 28% each year and reach $1.7 billion by 2027. The gym and fitness club market is valued at $34 billion, indicating that there is plenty of room for the emerging connected fitness market to expand. Recent trends have shown that consumers are willing to adopt new technologies and eliminate hygienic concerns for a premium price. However, the audience for such expensive machines could be limited as many consumers are still economically recovering from the effects of the pandemic. Space limitation in crowded cities also plays a factor that confines the growth of this market. It is unclear if the connected fitness market will be able to reach the same value or size as the current gym and fitness club market. Thus, Helix Fitness is targeting a rapidly growing but still limited market. The company’s market rating is around average due to these factors.

CEO and founder Lenny Snyderman appears to have extensive experience both in the fitness industry, though his LinkedIn is rather sparse. He was the executive vice president of CSA Fitness for more than seven years before pivoting to start Helix Fitness. According to this round’s raise page, Snyderman is the investor of lateral training and brings manufacturing expertise from Asia. He also claims to have a background in sales and marketing for both brick and mortar retailers as well as infomercials, though none of that can be independently confirmed.

The rest of the Helix Fitness team consists of sales, marketing, customer service, and a strategic advisor. Several notable sports figures sit on the advisory board as well, including former World Champion Boxer Danny Musico. However, Helix Fitness does not have any technical experts or software engineers on the raise page. The ability to utilize data plays an important role in the connected fitness industry, so this skill gap is concerning. 

While Snyderman brings years of fitness industry experience, he does not have any prior experience with startups. The lack of information on his LinkedIn profile makes it difficult to validate the impressive claims made on the raise page. Helix Fitness’s remaining team offers a good mix of skills, though it lacks strong technical or software expertise. These factors result in Helix Fitness receiving a slightly below average team score.

The biggest product differentiation from Helix Fitness is its 3D lateral trainer. Unlike traditional cardio equipment, Helix Fitness’s lateral trainers work the body in all three dimensions of human movement. Its unique lateral movement enhances lower body engagement, which increases calorie burn rate. Helix has received 11 utility patents internationally and domestically to protect its technology.

Established competitors in this market include Tonal, Bowflex, Mirror, NordicTrack, and Peloton. Peloton in particular gained a strong hold on the home fitness market during the COVID-19 pandemic, making it a key competitor for Helix. Helix Fitness’s products range from $2,000 to $5,000, which is on the pricier side compared to its competition. For example, Mirror sells its product for less than $1,500. 

A major point of concern for Helix Fitness is its software and data utilization. The company provides very few details on its classes and community features — areas where its competitors are very strong. The company currently offers free live classes via Facebook as well as a subscription to trainer-led classes of varying difficulties. These offerings are much more limited that those of Peloton, which has found major traction through its home classes. Helix Fitness does not seem as “connected” as competitors, and the company does not provide a plan for growing this area of the business. 

Helix Fitness is bringing a new form of cardio workout machine to the market, and it has secure patents for this design. However, the machine is quite expensive when compared to competitors. The company is also lacking in terms of workout classes and connectivity for users. Thus, the differentiators score for Helix Fitness is just average.

Helix Fitness’ recent revenue performance has been impressive. Its newest product, the Scoop Lateral Trainer, launched in January 2020 and reached more than $2 million worth of sales in its first year. The total revenue in the company’s most recent fiscal year is $4 million, showing a favorable 2.5x growth rate compared to the year before. Therefore, Helix’s revenue rating stands out the most amongst its overall performance score. In addition, Cleveland Cavaliers and Los Angeles Lakers use Helix Lateral Trainers in their training programs. Several notable publications such as Good Morning America and People also gave Helix positive reviews.  

Helix utilizes a direct-to-consumer distribution strategy via e-commerce platforms as well as direct-response TV sales. However, its social media presence does not appear to be strong. As of August 2021, Peloton has 1.6 million followers on Instagram. Social media presence is a good indicator of a company’s marketing performance, and Helix appears to be weaker than the competitors. In addition, the company is still not profitable and has accrued a high amount of debt to reach its current level of success. It has more than $1.7 million in total liabilities. High liability negatively impacts Helix’s asset-to-debt ratio. For those reasons, Helix’s performance score is slightly low. 

An investment in Helix Fitness comes with a very high risk profile. Financials are a large concern. The company has more than $1 million in debt, and its current assets are approximately equal to its debt. The company will need to bring in significantly more capital while also paying down its debt in order to avoid financial troubles. If a liquidation event were to occur, debt holders would have priority over equity holders. If Helix Fitness is not able to improve its debt situation, equity investors in this round may be left in the cold. 

Helix Fitness’s products are more expensive than the mainstream competitors. The company’s premium pricing might slow user growth and hinder market capture. Slower adoption creates longer lead time, which stretches the timeline for Helix to grow and scale. Therefore, Helix is exposed to some timing risk. Furthermore, Helix requires high capital intensity to constantly stock its inventory, and the company has no prior funding to use for this need. The combination of those factors leads to a funding risk. In addition, the company encounters some team risks as a result of the founder lacking prior start-up experiences and exits. The remaining team also does not have technical experts, which is a major need for Helix’s software support.

The big question for potential investors is if Helix Fitness can maintain its revenue growth. The pandemic has propelled sales, but that growth rate may not last forever. The company’s success will likely depend on maintaining its quality and reputation after the pandemic ends. The competition is getting bigger, yet Helix Fitness does not seem to have the software support that most connected fitness customers seek. Additionally, Helix’s marketing strategy is questionable. The company has strongly used TV infomercials to reach new customers.  However, in the age of the internet, television exposure may no longer be the best way to sell a product. Helix Fitness does not seem to have a robust online marketing campaign, which could impact the growth of its direct-to-consumers sales. 

The connected fitness market has a high growth potential, and Helix Fitness may be entering at the right time. The pandemic has boosted the demand for home gym equipment, and the company capitalized on the initial wave of connected fitness adopters. Helix Fitness has demonstrated its sales and distribution ability by producing impressive revenue growth figures in 2020. If it can keep developing appealing products and maintain its quality control, the company could earn a fair share of the market.

Helix Fitness produces unique connected fitness equipment that specializes in cardio. Its lateral 3D cardio trainer has shown popularity among home gym equipment buyers, earning $4 million total revenue in 2020. This success emphasizes that Helix is entering a growing market at just the right time. The company has also secured a patent for its unique product, helping to build defensibility. However, there is a lack of strong software support, and premium pricing could handicap its growth against the major competitors it faces. Helix also has some financial concerns, such as its debt and cost to manufacture equipment. Overall, KingsCrowd has rated Helix Fitness a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Zee Zhong.