Sequoia-backed Chinese Gym Chain Supermonkey Close To Unicorn Status Post Series E Round

Chinese gym chain Supermonkey, which started out in 2014 with a self-service, container-made gym box, is now near
a unicorn valuation of $1 billion after the completion of its latest Series E round at “hundreds of millions of yuan,”
its investors announced earlier this week.

 The Series E round was led by a sub-fund of CICC Capital, the flagship investment platform of investment banking
firm China International Capital Corporation (CICC). CICC served as the exclusive financial advisor of the deal.

 Supermonkey’s fundraising success rode on the steady growth of China’s fitness industry, supported by the country’s
increasingly wealthier middle class, a shift towards more sophisticated lifestyles, and a growing awareness of staying
fit.

 Since the launch of its first 24-hour, self-service gym box made of a container in southern China’s Shenzhen City in
2014, Supermonkey has grown into a network of nearly 200 fitness studios in operation or under development across
tier-one and emerging tier-one cities including Beijing, Shanghai, Guangdong, Shenzhen, Nanjing, Wuhan,
Chengdu, and Hangzhou.

 Its fitness studios and container-built gym boxes leverage the Internet of Things (IoT) to provide users with remote
control of door access, lights, air conditioners, and ventilation systems through a few clicks on their phones.

 Instead of charging members annually like most other gyms, Supermonkey features flexible membership services,
under which customers can purchase fitness group classes and usage to gym equipment on an hourly basis via a
mobile app or a built-in mini programme on Tencent’s ubiquitous messaging app WeChat.

 At a 4.9% penetration rate, China’s fitness market bears potential

 The new financing will help Supermonkey increase investment in talent recruitment and R&D of fitness courses, as it
seeks to grab a leading position in China’s currently fragmented offline fitness market.

 Overall, China’s gym, health, and fitness industry have been growing by an annualised 8.6% over the past five years,
with estimated market size of $7.5 billion in 2020, according to a report from IBISWorld. But the fitness penetration
rate stood at only 4.9%, shows statistics from China-based market researcher Daxue Consulting, indicating great
market potential compared to America’s 20.3% and an average of 10.1% across countries in Europe.

 Supermonkey’s valuation monument comes after months of dealmaking frenzy around top tech-enabled fitness
brands in China. Keep, China’s most popular workout app, closed $360 million in a Series F round led by SoftBank’s
Vision Fund in January.

 The deal, which reportedly valued the firm at about $2 billion, saw the participation of Asia’s private equity (PE)
powerhouse Hillhouse Capital and tech giant Tencent. Six months earlier, its valuation was just at $1 billion post an
$80-million Series E round.

 FITURE, a Chinese startup that develops smart home fitness equipment, raked in $300 million in a Series B round in
April – the startup’s largest funding round to date. Hong Kong’s All-Stars Investment, Legend Capital, DST Global,
and New York-based Coatue were lead investors of the deal.

 Before the new financing, Supermonkey raised 360 million yuan in a Series D round co-led by Chinese PE firm
Starquest Capital and Yao Capital, a fund backed by former Houston Rockets centre Yao Ming. The previous deal was
closed in February 2019 and was participated by Beijing-based Orient Hontai Capital.

 In December 2017, the firm raised its Series C round led by an investment vehicle associated with Sequoia Capital
China and China Media Capital, a fund led by China’s media mogul Li Ruigang. Its Series B round, worth 50 million
yuan, was completed in early 2017 and led by Shanghai-based Ventech China.

 Equity investment firm Fosun RZ Capital and The Arena Capital, an investor in the sports industry, backed the firm’s
Series A round in 2016. The investment size stood at “tens of millions of yuan.”

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