Ben Young and Greg Coleman pitch SworkIt, their free fitness app, in Shark Tank episode 717. SworkIt (short for Simply Work It), is like having a personal trainer on your smart phone. The app is the evolution of another app called Nexercise, which was started by Ben and Greg. Ben is a Wharton MBA and Greg is a former Air Force pilot who also got an MBA at Wharton. They formed SworkIt after meeting Ryan Hanna (not appearing on the show) who'd designed the framework of the SworkIt app as a project to teach himself coding.
The app is free and it gives users a workout with four components: strength, cardio, yoga, and stretching. Simply set your workout time and perform the exercises along with the app. The “premium” service allows users to save multiple custom workouts; adjust exercise, rest, and transition intervals; save their complete workout history; and usage of the “ask a trainer” feature. The premium service is also advertisement free.
There are literally thousands of workout apps, but SworkIt is considered one of the best since it's the most closely aligned with the American College of Sports Medicine's training guidelines which say a workout should include aerobic, strength & resistance, and flexibility components. There are also built-in safety measures so beginners won't hurt themselves. The best part of the workouts is there's no need to buy any special exercise equipment – all that's needed is a comfy spot to work out.
The app boasts nearly 10 million users worldwide and is rated in the top 5 of all fitness apps. Ben and Greg likely want a Shark to help them grow even bigger.
Will a Shark “swork” out a deal?
SworkIt Shark Tank Recap
Ben and Greg enter seeking $1.5 million for 8.5% of the company. They are sick of these excuses as to why people can't work out and they created Sworkit to pick a workout you can do anywhere at anytime. They say it's like Spotify, but for workouts; you can skip a difficult move like you skip a song. The app even merges with Spotify so you can work out to music.
They launched the company a year ago and they create all the content. They got the idea when they made $2 million with a fitness tracker app five years ago. Last year, they made $775K, one-third of that from advertising and two-thirds from subscriptions. In the last three months, they did $90K in sales. The company raised $2.5 million in VC money. They'll be launching premium content with equipment soon, too. 2.9% of users convert to the premium service, but the free app is still profitable – even though they have excess ad inventory space.
Mr. Wonderful thinks they are very credible in their space. He offers them $1.5 million in debt at 7.5% for two years with 2.75% of the company as a kicker. Mark offers $1.5 million for 10% and he gets $1.5 million of worth of unsold ad inventory; he says it's a win/win. Lori says she's been listening and she was on the fence. Mark interrupts her and Lori says he's being rude. Mark tells Ben and Greg they are taking a risk listening to Lori.
After a break, Mark is getting impatient. Robert says, “Mark, let her talk.” After all the blustering, Lori says she can't see the valuation; she's out. Robert says he was going to offer $1.5 million for 16%, but Mark's offer is better; he's out.
Barbara says Sworkit is the answer to her problem, but should she invest $1.5 million or $3.99 for the app to get in shape. She's out, she's downloading the app. Mark asks if they have a deal and Ben and Greg say yes and shake hands with Mark. In the hall, they say they like what Mark brings to the table and his sports connections.
RESULT: DEAL with Mark for $1.5 million for 10%
SworkIt Shark Tank Update
The deal with Mark Cuban seemed like a sweet one, and Ben and Greg left the Shark Tank celebrating. Unfortunately during the due diligence process, roadblocks arose. Mark's vision for SworkIt and the entrepreneurs' vision didn't line up. The deal fell apart and the pair did not end up getting a Shark backer for their app.
Even the death of the deal wasn't enough to kill off SworkIt. The pair hopes to attract other investors to make their dream a reality.