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How iFitness became West Africa’s leading gym chain – The iFitness case study

By Guardian Nigeria
20 October 2022   |   3:11 pm
The iFitness story When Foluso Ogunwale, an HR executive at one of Nigeria’s leading banks, moved homes into one of Lagos’ affluent estates in 2013, it was mostly for comfort. He had a thriving Mobile Electronics business that turned over upwards of 400 million naira (circa US$2.5m) annually so he was quite comfortable. Foluso was…

Foluso Ogunwale is the founder of iFitness.

The iFitness story

When Foluso Ogunwale, an HR executive at one of Nigeria’s leading banks, moved homes into one of Lagos’ affluent estates in 2013, it was mostly for comfort. He had a thriving Mobile Electronics business that turned over upwards of 400 million naira (circa US$2.5m) annually so he was quite comfortable. Foluso was already accomplished in his career, but he had a desire to create something transformative as an entrepreneur and his new environment provided a direction for that desire. The only gym in the neighbourhood was only about 50sqm, ill-equipped and not very decent in appearance. He also noticed that a lot of people in the locality would be happier with a better gym option.

Globally, gym chains are popular businesses especially in South Africa, which, according to The Economist, is said to generate the world’s highest fitness revenue of over $931 million. Foluso recognised quickly the gap and opportunity in his new locality and went to work. His vision was clear from the start – he wanted to build a first of its kind gym chain in Nigeria and so he founded iFitness in 2015. The need for a gym chain was clear: Nigerians are interested in fitness. As more people pour into metropolitan centres across Africa, the need for gyms would become more apparent and dedicated fitness spaces would be the go-to option for most of the urban population.

Scholars have highlighted the acute need for exercise as metropolitan areas grow. Dr Lucy-Joy Wachira of the school of Public Health at Kenyatta University, explained that sedentary lifestyles are becoming increasingly prevalent across sub-saharan Africa, as populations grapple with new urban convenience. Connectivity is vital of course, but excessive screen time has begun to have an effect on African communities, many of whom had healthier traditional lifestyles in the past. Lagos, in particular, tops the list of cities with the highest traffic congestions in Africa, and is ranked number 9 worst city to live on the Global Liveability Index 2022 exposing the gap in the overall wellness condition of residents and making a perfect business case.

Nigerian interest in athletics is also growing. 2022 saw one of the most successful campaigns  in the international arena with 35 medals won at the commonwealth games, including 12 gold medals, and a world-record-breaking run from Nigeria’s Tobi Amusan in the Women’s 100m Hurdles at the World Athletics championship in Oregon. iFitness is therefore tapping into a zeitgeist of metropolisation and a regional focus on fitness with a mission to ‘make fitness common.’

Bringing to bear his experience in entrepreneurship, in three years, iFitness organically grew into four outlets and Foluso started looking for investors to scale the success and impact. There were many traditionalists, VCs and PEs who couldn’t grasp the viability of a gym chain or the iFitness vision hence fundraising stalled for many months until that first meeting with Yomi Jemibewon marked a turning point for the company.

Making the connection

In February 2018, CardinalStone Capital Advisers (CCA) came on board with their hands-on management approach and facilitated access to bridge financing that doubled the number of outlets by December of the following year. By this time, CCA had finished due diligence, instituted a board of directors with clear roles and responsibilities, settled all liabilities, supported the recruitment of professionals and now committed a first tranche of investment. The speed, commitment, and boots-on-ground approach built Foluso’s confidence in his newly found partners.

“They moved with speed. They were the only PE firm to visit our branches – we toured all four branches the same day. CCA did not just act as consultants, they approached iFitness with an entrepreneurial mindset, understood the basic issues around startup businesses and didn’t act arrogant or dismissive in their approach. CCA was most excited about partnering with us,” Foluso explained.

For Yomi Jemibewon, a Partner at CardinalStone, he was impressed by the consistent diverse crowds at each location. The branches maintained a good level of activity, even outside of traditional hours and he saw the potential immediately. CCA would typically select partners with a strong unique selling proposition, for differentiation purposes and one open to an active investment approach which includes consultation and management advisory. iFitness was compelling and over an extended assessment and research period, the business thesis was validated.

“Our decision to invest in iFitness was driven by a combination of factors including; seeing a significant market opportunity with clear levers for growth in place; recognising that the fitness business is a fragmented regional market ripe for consolidation, and particularly, the availability of a strong and experienced promoter in Foluso. Foluso was the right partner to back in order to create the leading regional player,” Yomi said.

The strong institutional support provided by CCA was critical to iFitness successfully navigating the COVID pandemic lockdown period of six months in Nigeria. When the business re-opened in September of 2020, it only required nine months to add five new outlets. This was aided by a second round of funding injected by CCA which helped the brand to return to a profitable path post-Covid. Today, iFitness boasts of 19 outlets, 273 employees, and more than 19,000 active subscribers.

CCA and iFitness, a partnership that works (Due diligence and assessment)

Foluso’s dream was to grow iFitness to 40 locations around Nigeria. But with CCA’s involvement, this dream has been expanded to 200 locations across West Africa with a goal to make iFitness a leading regional player. CCA is known for partnering with growth-stage high-potential companies capable of longevity and dominance and has brought on its management and operational expertise in implementing best practice governance structures on ESG matters, strict adherence to statutory regulations, as well as standard operating procedures reminiscent of a global fitness brand.

For Foluso, his mission to provide a chain of decent, convenient and affordable fitness centres as a way of promoting healthy living is well on track and both partners remain confident in the prospects. Globally, fitness represents an  $87 billion market growing at circa three percent annually with the highest growth expected to come from the Middle east and Africa.