PaleoTraining seeks 7.5 million to grow in six countries with its own and franchised centers

PaleoTraining seeks capital for its international expansion. The Canarian training company based on atavistic movements has opened an investment round to attract around 7.5 million eurosas you may have learned 2playbook. This, after invoicing 2.5 million euros in 2022, a figure that it plans to repeat this year, yes, with three fewer centers than it had a year ago.

The chain managed 20 facilities in Spain and one more in Ecuador, which stopped working due to the pandemic. Another 6 franchises chose not to renew their contract, which now operates 14 clubs and is committed to growing with investment profile managers who have sufficient capacity to start more than one club.

The company’s objective is to strengthen its network of centers both in Spain and abroad. “We are looking for a hybrid round between capital and equity that allows us to grow in the next three years and that allows us to advance with our own funds from the fourth”, explains Berry Van Veldhoven, CEO of PaleoTraining. The company is relying on Baker Tilly, a global provider of consulting services that acts as a broker to find investors willing to provide the necessary financing to undertake its expansion plan. In parallel to the agreement with this firm, which is limited to the European market, the chain is in direct conversations with investors from Canada, the United States and Mexico to seek financing.

In its roadmap, PaleoTraining plans to grow through two proprietary formats and different gym formats. input, the company aspires to open 30 clubs of its own in strategic cities in the medium term with the aim of later expanding with franchises. For now, the chain wants to focus its growth on six target countries: Spain, Italy, Germany, France, the United Kingdom and the United States. “We do not rule out the possibility of opening centers in other countries that align with the conditions we are looking for, such as Switzerland, where an interested party has come to us, but the initial plan is to focus on those six countries,” says Van Veldhoven.

The goal set for 2023 is reach December with a dozen signed projects, two or three of which could see the light of day before the end of the year. “We are negotiating with different locations, we are close to closing five and we hope to add a few more before the end of 2023”, complements the CEO of PaleoTraining. To do this, the company hopes to close an agreement with an investor in the coming months to expand its brand globally. At the moment they have already held meetings with potential interested parties from Madrid, Barcelona, ​​Valencia, Lisbon and Amsterdam.

Growth through franchises and own centers financed by investors

In parallel to raising funds to expand with its own centers, it also seeks to grow through franchises with businessmen who seek to manage centers. To grow with this formula, has started negotiations with interested parties from Madrid, Barcelona, ​​Valencia, Milan and Switzerland to start up any of the center models they offer. The company has raised the entrance fee, which will vary between 5,000 euros and 42,000 euros, depending on the model of the center, while the fees monthly reaches 1,500 euros in the intermediate model or 50% of sales, in the case of the flagship.

PaleoTraining seeks to grow in the market with three types of establishments according to the size of the municipality. The biggest, the flagship, consists of rooms of about 500 square meters that require an investment of 400,000 euros. This format provides investors with territorial exclusivity and offers them the ability to organize coaching trainings and other events. The second model is smaller, between 200 and 300 square meters, and requires an investment of around 200,000 euros. The smallest format, called spaceconsists of a small personal training room that implies a minor investment, between 50,000 euros and 80,000 euros.

In its growth plan, PaleoTraining does not rule out the hotel segment. In 2021, in fact, it launched its first room in a hotel in A Coruña, a commitment that it sees feasible to replicate for its personal training center model. “We will explore the model for hotels, because economically it makes sense, although it does not allow us to give the user the value that we give to the rest of the people who may have greater continuity in another of our centers”, he comments. The chain, in fact, has received interest from two hotels in Barcelona to integrate its offer into their facilities.

The company provides service to 14,000 members in its centers, although only half are active in the system. The company’s medium-sized studios reach their break even with between 160 partners and 170 registered. Among the transformations carried out in recent months is the elimination of the entrance fee and the reformulation of its rates: of a monthly subscription that varied depending on the attendance at the gym, at a single rate with unlimited sessions. The chain, however, does require the purchase of a welcome pack that includes a towel, non-slip socks, and a reusable bottle.

Reformulate the concept to find more investors

The company has reformulated its service proposal in recent months to focus on an investor profile seeking greater profitability. “We are positioning the product to make it more appealing to customers outside of Spain,” says the person in charge of driving the company’s transformation. One of the changes is the commitment to mix content in Spanish and English to reach a more diverse and global audience. A strategy that they have accompanied with a renewal of their brand. “We have reformed the centers and the product to offer a superior quality and show the potential and reach that it has in the market”, says Van Veldhoven.

The company, yes, maintains the essence with which it was founded by Airam Fernández in the Canary Islands in 2009. “We continue to bet on natural movements in an original environment, with training hiit that differs from other chains because of the environment”. The company has also wanted to enhance the value of the four distinctive pillars of the brand: movement, nutrition, well-being and community. All this, through events and technological products that reinforce the brand. In this sense, works to develop a digital application that not only provides service to the user within the center, but also offer services outside the four walls of the gym. One of the main novelties that it will have will be a sensor that, through Artificial Intelligence, will measure the user’s activity.