“It’s never felt like the right time [to raise capital] before… but I think we’re at a point where within our core market of Australia, where we’ve done an incredible job getting to this point, but in terms of where we take the tech and market expansion, we’re at a point where bringing on capital… can help us expedite those areas,” she said.
“We want to make sure we don’t rush it, and we want to bring on a strategic partner that’s aligned with our vision.”
The pair is also plotting an expansion to the UK in the next six months.
“We have quite a strong organic base there. We want to be deliberate in how we launch – you can’t take a product to another market and change nothing and expect it to work as well.
“But the Aussie lifestyle around health and wellness is something that… from our research we’ve found is inspirational for the UK.”
In the last year, KIC users completed 19 million minutes worth of workouts and viewed 3 million recipes. The KIC app has been downloaded more than 500,000 times.
The business also has a compound annual revenue growth rate of 28 per cent over the last three years, and it is cashflow positive.
When shifting from a website to the app, Ms Henshaw said they structured their business plan around one key philosophy she had read in a business book – you need five months of financial coverage to be secure.
“That’s what we based the business off – we looked at how much we could build up a team, how much revenue we needed, and how long we could sustain the business with our subscribers. We wrote it on an envelope in Steph’s house,” she said.
“In the financial modelling we did, we had the subscription base from the website… and we assumed we could bring maybe a quarter of the subscribers across. But, we had more subscribers on launch day [for the app] than we’d had in our history.”
An undeniable factor in the company’s success to date has been the co-founders’ ability to tap into their own personal audiences. On Instagram, Ms Miller has 1.5 million followers, while Ms Henshaw has more than 305,000.
Between the pair and KIC’s channels, the business reaches 2.1 million people via social media.
This has enabled the pair to keep paid marketing expenses to a minimum and invest in growing their community organically – something Ms Henshaw says has differentiated the business from its growing group of competitors.
Locally these competitors include Kayla Itsines and Tobi Pearce’s Sweat, which was sold for a reported $400 million to tech giant iFIT Health & Fitness Inc in 2021, Tammy Hembrow’s Tammy Fit, Dustin Martin’s Drip and Centr, which was formerly associated with Chris Hemsworth but was snapped up by a US private equity fund HighPost Capital in April last year.
“When we started… we didn’t have a marketing budget… We had to get creative in how to reach people… so we used the resources we had,” Ms Henshaw said.
This, Ms Henshaw says, positions KIC well against its competitors in an environment where return on investment from advertising on Instagram and Facebook has dropped markedly since Apple changed its privacy policies to let users stop apps from tracking them.
“For businesses that have relied on putting 95 per cent of their budget into paid marketing, their core growth channel has become a lot harder,” she said.
In the five-plus years since the app launched, Ms Henshaw and Ms Miller have made a purposeful effort to broaden the brand, bringing in a mix of trainers, intending to develop the business beyond their own personal audiences.
“Steph and I were everywhere. To build a sustainable business that could scale globally, we knew we needed to diversify the product away from us,” she said.
The co-founders have also brought their app development in-house and invested in data analytics to drive their business decisions, ranging from what content users want to what time of day to launch new products.
In turn, the business has increased the lifetime value of its users by 30 per cent in the last two years and reduced customer churn by 13 per cent in the last year. An app update in early January triggered a 250 per cent surge in daily active users, versus its 2022 average.
“We have really honed in on retention… Acquiring people is one thing, but the next is keeping them.”