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LeBron James # 23 of the Los Angeles Lakers dunks the ball against the Philadelphia 76ers on January 25, 2020 at the Wells Fargo Center in Philadelphia, Pennsylvania.
Jesse D. Garrabrant | NBAE | Getty Images
Ladder, a nutrition company found by basketball icon LeBron James and actor Arnold Schwarzenegger, has been sold to technology fitness platform Openfit, the companies told CNBC.
Openfit CEO Jon Congdon and an undisclosed group of investors bought Ladder, buying shares from investors including investment firm Main Street Advisors. Terms of the agreement were not made available.
In an interview with CNBC on Tuesday, Congdon said James and Schwarzenegger would remain minority shareholders and help with future promotional content.
“We are looking to grow the brand,” Congdon said, adding that the company would incorporate Ladder’s nutritional supplements into subscription offerings.
Openfit is a mobile application that monetizes private training and exercise classes through subscriptions. Packages range from around $ 40 for three months to $ 100 per year. The company says it has around 130,000 subscribers.
Congdon said the business was “profitable” but did not disclose exact revenues. He said, “These figures may be available in the not-so-distant future.”
When asked if that means Openfit is looking for an IPO, Congdon, the co-founder of fitness company Beachbody (parent company of home exercise P90X), said he couldn’t comment. He also didn’t deny the notion, adding that “all possibilities are open to us, and we are considering all possibilities.”
With the acquisition of Ladder, which has sales of $ 4 million for 2020, it will combine nutritional supplements with its “live and on-demand fitness programs, personalized nutrition plans and virtual access.” to certified trainers.
“We are looking at 300% growth of over 400% as a minimum next year and even more than that in the years to come,” Congdon said. “We hope they will form a significant part of our revenue base going forward.”
NBA player LeBron James and former California Governor Arnold Schwarzenegger in Los Angeles, California.
Chelsea Lauren | FilmMagic | Getty Images
James and Schwarzenegger founded Ladder 2018, with the goal of creating nutritional products for athletes to fight cramps in action. The idea stems from James’ severe cramping in Game 1 of the National Basketball Association Finals Series in 2014.
“After pushing my body to its limits season after season, I needed a different level of supplements that I could trust to complement my workouts and help the recovery process,” James said in a statement. “With Ladder we made it happen. We were able to work with experts to create an incredible line of certified high caliber supplements for all athletes, but we have always recognized that this is only part of the process.
“Now, with the reach and resources of the Openfit platform, we’re excited to bring it all together and create a new level of training and nutrition that meets everyone’s individual needs,” said James.
“It’s in good hands,” Schwarzenegger added in an interview with CNBC on Tuesday. “It’s the right decision to make.”
The former California governor added that he will be involved in creating future content and use his resources to solicit the best trainers for the Openfit platform.
“I will do anything to make them successful, and I think LeBron will do anything to make them successful,” Schwarzenegger said. “We are all partners. We will do this together; this is our mission.”
With Covid-19 restricting access to gyms and limiting in-person contact, Congdon said users have turned to mobile apps for workouts and training.
He said Openfit research found that about 90% of practitioners who converted to home workouts during the pandemic “realized that it is as effective or more effective than they used to be.”
“We believe home fitness is here to stay,” Congdon said. “It’s accelerated what we’ve always assumed – anyone who makes the living room or garage as attractive, fun and efficient as a gym is going to unlock a lot of value.”
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