Obé Fitness Nabs Backing from Samsung, Athleta

to people familiar with knowledge of the matter. Joining us now are the co founders and co chief executive officers of Obey, Mark Millette and Ashley Mills. They're joining us on the phone from Brooklyn, Mark, Ashley, Thanks for taking the time. How are you doing this afternoon. We're doing great. Much for having us, Tim, Yeah, thanks for joining me. Well, actually, I want to start with you and talk a little bit about the fundraising process here. How difficult was it

to raise this money from these companies Samsung, Athleta. Other participating investors include ww International that's formerly known as Wait Watchers, Cabo Venture Partners, Well Use Entertainment, and more. How difficult was that to do? During the pandemic. Yeah, it's a

great question. So we've been very careful UM in the history of our company now to sort of over capitalize, and so it was a it was a big decision for us to go out and raise our Series A. Obviously, you know with the pandemic, UM we were growing at a very nice clip free pandemic, but the pandemic was merely grew four. Yeah, it was. It was a pretty wild year to day the least UM and a lot of folks have been coming to us for quite some time asking its raise and we just we weren't ready.

And we were obviously super hands down building the business that that essentially skilled overnight. UM. So from a fundraising perspective, UM that you know, that piece of it was not challenging. I think, UM, what was like most exciting for us is being able to find the right partner. We really believe that you are the company that you keep, and so to be able to UM you know, have common

ventures lead around. They focus on a lot of a lot in the health and wellness space UM, and I think all of our our new partners really see the future of fitness lifestyle in an important way. And then to the strategics who joined around so um ww Athleta

and Samsung. All of those partners we've had relationships with for quite some time, for years actually, and in terms of various partnerships that we've worked on with that, and so it was it was a natural call when we when we started to think about fundraising to include them in those conversations. And we're absolutely thrilled um with with

how the rays sort of turned out. We believe that Obeys as at the center of the good decisions business to right and the good decisions ecosystem, and so we're excited um for them to all be involved as we build the first of this kind of entertainment network and really take on this category that we're calling fitness lives

out well. So it's so interesting actually you describe it as a first of its kind of entertainment network because both you and Mark have a background in being talent agents, right, having clients and and and being in the talent entertainment business. So so Mark, what does mean to have a talent entertainment network rather than than having a fitness platform. Yeah,

you know, absolutely, Tim. When we when we first started Obey, our vision was to reinvent um, what what daily movements felt like, what it looks like, and what it could really provide people at home. So, you know, in our old job as as talent agents, with our jobs to nurture great talent um and to bring you know, pop culture to people everywhere, right, to really create these incredible uh mutual experiences around content and get people excited to

pay depending on their their their niche, tastes and preferences. Um, So we started obeying. We thought, wait a minute, fitness hasn't been reinvented in a while, right, It's still sort of looks the same, it feels the same. It doesn't feel topical, it doesn't feel variety, field doesn't feel fun um. And so that entertainment pieces really adding that fun factor, that topicality. Um Our instructors are the best in the business. They're incredible. They are the superhero best friends who motivate

throughout the workout and hopefully throughout the day. Um, you know, transcending screen and jumping right into your living room, your hotel, your basement, your office, wherever you're working out with us. And so we've also taken it to another level. We've partnered with some of the biggest Um, you know, stalwarts of the entertainment business such as Disney Plus, NBC, Peacocks, CBS, Paramount Um. The list goes on to bring really fun

pop culture center classes to our audience as well. We've had classes with Game of Thrones themes, uh, Sex in the City themes, Cruella from from from Disney Plus themes Right. So it's really about taking fitness and making sure it's not boring, that we can keep you having fun, getting the results you want, and hopefully putting a smile on your face in the process. Hey, actually, just in the last twenty seconds that we have here, and then sit tight because we're gonna come back to you, both of

you after we do some news here. How would you describe these classes for people who may be hearing this and saying saying, wait a second, this sounds like it's it's just watching someone work out on TV and and not different from a typical class. Just fifteen seconds here. Yeah, it's a great question. So we offer twenty two live classes a day so you can work out with with all of our members across across the country and across

the North America. Here needs shouted out in class. You can also take one of our twenty different modalities on demand across all levels of duration. From a content perfective. Again, we have the best in class talent um. It's a really fun experience. We think of it as kind of a high broccoli approach to fitness. Um. You're going to get a really effective workout, but you're also going to

have a great time during the class. Mark Ashley, I I just got a question during the last break from somebody who's listening right now in the Bloomberg Network who asks, why would I subscribe to this if I have a Peloton subscription? Do they have enough content to get people to switch? Who wants to take it? Uh? Yeah, I'll jump in here, Tim. The answer is we have. We have plenty of content, uh for anyone and everyone you know for that twenty seven dollars a month or annually.

We have so much content to save all of your fitness needs at any level in the game. Right if you're a beginner or if you're a triathlete, we are here to to help you to find the results you're looking for and hopefully help you make some friends in the process. Our community is off the charts, but we have over twenty modalities over twenty instructors, again the best in the business, and class links from ten minutes all

the way up to one hour long. So whether you're working out for ten minutes, uh, you know, in your office with the door closed, or a full hour at home, UM with the kids asleep, we really have something for everyone. But if Peloton does offer that monthly subscription that you can get on the app or you can use on an iPad or a computer without actually having one of the pieces of equipment, UM, how do you get someone

to switch Mark? Yeah, you know, I think I think the reason that people love Obey in addition to the community, in addition to our incredible talent, is the premium nature of what we deliver every day. Right Our our content is gorgeous, It is so personalized, it is colorful. Our signature light box really you know, provides like a music video in your own living room when you're working out with us. And I think that the premium nature of what we do in the variety they're in UM is

really what our audience UH takes to. You know, We've learned from so many people over the years and specifically even as we head in this COVID Transition world. For over fifty percent of our audience, we are their fitness everything, and then for another substantial portion about you know, we are a main dish on their fitness buffet. In the same way that you don't want to, you know, eat the same foods every day, you might not want to

move the same way every day. And certainly if we are your fitness everything, we will keep you moving in different ways every day. And if we are on your fitness buffet and you're going to the local bar studio or local yoga studio as well, uh, we're here to get you on those days where you're at home or on the go. Hey, Ashley, you mentioned earlier that there were four hundred increase in subscriptions. That's correct, right, and

during the pandemic. Um, how did you how did you keep operating during the pandemic because you did also say that you were shooting live shows and live classes for for your network. Yeah, absolutely so. UM. You know, in the very very beginning of the pandemic, um when everything when everything hit we um, you know, we basically assembled

production studios are in our instructors homes. Um. And that that went on for you know, obviously several weeks um as as the government was figuring out what was what the thing about our production is that we it allows

for social distance. There's not a lot of people, a lot of crew members that are needed in the studio and some of it can be done remotely and so um we were deemed an essential service uh pretty early on in the pandemic, so we were able to continue to to bring people back into the studio again with you know, absolutely adhering to all of the safety precautions.

Can you talk actually more about the entertainment nature of this if you are just joining us, Mark and actually our former talent agents who built Obey as an entertainment network rather than a fitness platforms. Actually I'm wondering about the entertainment aspect to this and the idea as you and Mark have been talking about that. There have been themed classes in the past, um that have been uh

you know, theme to Game of Thrones for example. Absolutely, so there's certainly those tenthole moments, but I would also, um, you know, in talking about our content, I would look at it outside of the tenthole moments as well, and sort of like our core offering, which are these you know, twenty different modalities across a number of different durations. So Mark and I we never took our talent agent hats off.

We you know, when we left the agency business, we started looking immediately for who were the really incredible, bulliant personalities, who were great storytellers, who could lead our members through a class and what should be an emotional journey. And so they given for all of our classes that they're super effective and you're going to get a great workout. And the X factor is the talent in the personality and what we call entertainment right, we're entertainment in fitness meat.

So that is, yes, the talent. It is the beautiful set inspired by contemporary artist James Terrell and dance Leaven. It is the music um, it is the storytelling. It is a topical nature. We do twenty two live class of the day and because of that we can address what's happening in the world and so in a lot of ways, taking a class at Obey um it's going to deliver on the same level of entertainment that you would get from a television show. But you're you know,

you're getting a workout during the process. Yeah, what actually getting a workout while you're streaming whatever you're watching. That would be sounds kind of nice. Hey, Mark, wondering about the product pipeline here, are you thinking at all about hardware and and getting into the hardware business. I see Samsung as a as an investor, the company of course

known for its hardware. Yeah. Absolutely, so you know the the year ahead, and again, one of the reasons that we raised was to build out our our good Decisions ecosystem, right we see, we see Obey as the center axle of that ecosystem. So it's not just about the push ups and the planks. It's about what you eat, what you wear, who you connect with, uh, your mindful level of mindfulness, tell you sleep, etcetera. On the hardware front,

to date, we have required little to no equipment. When I say a little to know, I mean workouts that are body weight only all the way up to workouts that require maybe some you know, handweights or resistance bands. On the hardware front, we've heard from a lot of our members that they have purchased hardware during the pandemic, and frankly, they're not always feeling that inspired to use it.

So we are beginning to explore you know, how our content, how our premium content and our specific point of view could translate into you know, heavier gym equipment and hardware related verticals. On the electronics front, our goal is to be the leader and fitness lifestyle for all people in all places, across all screens, and that includes wearables. So right now we're we're digging deep into our wearable strategy and we can't wait to uh to get that out

to our audience as soon as possible. In a very obey way, of course, I actually want to give you the last word, give us a few more details on the wearable strategy just fifteen seconds. Absolutely so um you know where most people wear a wearable UM and we're excited to be able to track our members in class UM and also in their their daily life. Starting to make sense why Samsung is an investor in the company. Mark Mollette and Ashley Mills co founders of the fitness

platform entertainment platform oh Bay. They're also co CEOs of the company. Joining me on the phone from Brooklyn, New York,