Fitness startup scores angel investment

Cape Town – Local startup FitKey has secured a cash injection from angel investor Justin Stanford.

The investment is expected to help expand the fitness app which uses location data to connect people with workout venues.

While the exact funding is confidential, Fin24 understands that the “six-figure amount” resulted from FitKey’s ability to solve an “existing problem”, said Stanford.

The structure of the funding is based on the 'Simple Agreement for Future Equity' (Safe) standard developed by YCombinator. The instrument removes maturity dates and debt for startups.

“We are the first South African company domiciled in South Africa to raise on Safe though with Barclays' Tech Lab's Africa accelerator in Cape Town using Safe, it’s quickly becoming the standard,” said FitKey co-founder Evan Walther.

Unlike a number of apps which depend on advertising for revenue, FitKey’s subscription model could see the company attain high profitability with scale.

Members are not bound by gym contracts and can take an unlimited number of classes or a maximum of three per month at the same studio for a flat rate.

Walther said that investors have responded well the startup’s funding round.

“Our round is oversubscribed and we’ve raised enough capital to reach breakeven. Though, we're still accepting investment from value-add investors through the end of the month.”

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