Last Friday, I met with VirZOOM co-founder and CEO Eric Janszen in Cambridge, Massachusetts. VirZOOM, which we recommended to you two years ago, was voted a Top 10 Most Innovative Company by Fast Company in 2018 (in the “Wellness” category).
Eric had some great news on several fronts. But before I share with you what he said, here’s a brief refresher course on the company.
VirZOOM makes a conversion kit that turns a stationary bike into a virtual reality (VR) bike. It offers two kinds of kits. One is for gyms, university fitness centers and other commercial clients, and costs $3,000. The other is for consumers and costs only $300.
I tried out the latest (third-generation) version on a local Cambridge gym bike, and it really works. It transforms a boring cardio workout into an exciting VR adventure. I saw myself in a VR world on a flying horse, a tank rumbling into battle, a horse chasing and lassoing “bad guys,” and a bike speeding along country roads in Brazil and other countries.
And amazingly, I was barely aware of just how hard I was pedaling.
I returned to Baltimore wishing this bike was available at my gym. I’m definitely going to suggest it to my local LA Fitness people. They can buy a complete turnkey system for $2,995 with an additional $995 annual fee (for remote maintenance and updates).
In the meantime, I’m going to order the VZfit Sensor (home) Kit. Eric told me it will become available on Amazon in the next week or two for as little as $99.95. I’ll buy the Oculus Go for $199, and I’m good to go.
Previously, VirZOOM’s tethered VR systems cost $2,000 or more. This is significant progress.
Getting Amazon as a retailer wasn’t the only exciting news Eric had to tell me. VirZOOM just formed a partnership with Decathlon, the world’s largest sporting goods retailer with 1,500 locations in 49 countries. This Friday, Decathlon is opening its new flagship store in Emeryville, California, and will feature VirZOOM’s VZfit Sensor Kit. The kit will be sold as an option for Decathlon’s own branded stationary bikes.
Decathlon is VirZOOM’s second major commercial partner, following its partnership with Life Fitness last October. With annual sales topping $1 billion, Life Fitness will be selling VirZOOM’s bikes to the more than 20,000 health clubs and fitness centers in its network.
VirZOOM encourages users to exercise more – and harder. Riders hop on their bikes an average 3 1/4 days a week compared with the 1 1/2 days that conventional stationary bike riders average. VirZOOM riders also average 38 minutes per session, almost twice as much as the 21 minutes that regular stationary bikers do.
The statistics say that VR makes a big difference. I say that VirZOOM’s bike is a blast. And I met another person at the Cambridge gym who backs up both the stats and my own personal experience.
He’s a retired four-star general with a long and distinguished career in public service. When Eric and I entered the gym to demo the VirZOOM bike, he was already on it. He told us he had just started using it and that it’s “addictive.”
“It became my favorite exercise machine in just a few days’ time,” he said.
In the age of companies like Lyft, Uber and others launching initial public offerings while still losing millions of dollars a year, it’s good to know that VirZOOM has a profitable business model. It costs $25 (cost of goods sold) to make the VZfit Sensor Kit (and that number should go down significantly in future years). It sells it at $99.95 plus a monthly fee of $14.95. The profit margin speaks for itself, and the monthly recurring revenue adds up over time as more and more VZfit Sensor Kits are sold and go online.
There’s a huge difference between where VirZOOM was two years ago and where it is now. I see progress everywhere… improved technology, product, user experience, price and marketing. So I’m still a strong believer in the company’s huge upside. Eric has done a nice job bringing the company this far… on the threshold of sales taking off.
Luckily for members who didn’t get into the investment opportunity when we recommended it in April 2017, VirZOOM is raising again. At an $8 million cap and a minimum investment of only $250, I believe it represents an even better deal now than it did two years ago. The raise ends on April 14. You can find more details about the raise on the Wefunder site right here.
Co-Founder, First Stage Investor