Playbook Series A

We are investing $5M in this oversubscribed $8M Series A round. We were able to secure allocation given our relationship with Jeff (CEO) and e.ventures. Fellow syndicate lead Miles T. Bird and I have teamed up to co-syndicate this deal together.

I was Introduced to the founder through Dan Rumenik @ AirAngels syndicate.

Here is why we are excited to have secured allocation in Playbook…

Timing is Now: Playbook is the Etsy, Shopify, or Patreon of the fitness & athletic market - all the independent contracts in this space are looking for solutions to monetize their content and coaching. Covid has blown this opportunity wide open;

Growth During COVID: With gyms closed and fitness classes cancelled for the foreseeable future, Covid is pushing Playbook’s thesis forward on a global scale. Every creator, coach, instructor, and gym needs a digital solution at this time and Playbook is the best equipped to enable these creators to build reliable subscription income revenue from their content;

Scrappy Founders Mindset: With $0 spent on paid consumer acquisition and a low burn of ~$50k / month, the Playbook team has built an incredible two sided marketplace for the fitness ecosystem with a consumer facing app and a creator app (similar to how Uber has a rider app and driver app);

Impressive Scaling Traction: Playbook has already grown 500% this year, currently at a $3.6M GMV run rate w/ 36k subscribers and expecting to be at a $6M GMV run rate w/ 50k subscribers by the end of the year;

Massive Market + Exit Opportunity: The industry is evolving rapidly with the transition to digital. In the US alone, spending on big box gym memberships is over $30B / yr with only 3% of members purchasing personal training at $10B / year. With the tailwinds of growth from COVID, Playbook is going after both of these massive market opportunities. The Playbook founders admittedly believe there is a multi billion dollar valuation / exit opportunity here. They’ve already received acquisition interest, but have opted to turn it down;

Strong Roster of co-investors: e.ventures (early investors in Groupon, Bird) is leading this round with $5m investment, w/ participation from Founder of CAA / President of Disney (Michael Ovitz), Abstract Ventures (Hippo Insurance, Ripple), FJ Labs (Stripe, Flexport), Porsche Ventures, + other existing investors.

Playbook

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Playbook is a mobile fitness marketplace where independent contracting “creators” (trainers, instructors, coaches, influencers, gyms) can turn their iphone content into subscription income.

• TechCrunch article announcing seed round 
• Video highlighting product

Playbook makes it seamless for fitness creators to turn their iphone into a “business in their pocket” via the Creator App. (Playbook has two apps - Creator & Consumer). The Creator App enables creators to create, manage, store and curate content + analytics + payments + community engagement + marketing + training. Creators essentially publish content on the Creator App and monetize the content on the Consumer App.

Playbook’s Consumer App is one of, if not the highest, rated app in the category on both iOS and Android with 5k+ reviews @ an avg. of 4.9 star ratings. For $15 / month or $100 / year, consumers get unlimited access to a massive library of 17,000 classes created by 180+ highly influential creators in the industry including Magnus Lydback (Ben Affleck’s trainer), Don Saladino (Ryan Reynolds & Blake Lively’s trainer), Ron Everline (Kevin Hart’s trainer), Julian Smith, Nina Agdal, and many others.

Spending under $2M to build out the product and the team...and spending $0 on consumer acquisition to acquire 36k subscribers...Playbook has already grown 500% this year to a $3.6M GMV ARR (they take 20%) and they are expecting to be at 50k subscribers and $6M GMV ARR by the end of this year.

It is for these reasons that I am very excited to have secured $150k in Playbook’s oversubscribed $8m Series A round investing alongside e.ventures (lead @ $5m - early investors in Groupon, Bird), Michael Ovitz (Founder of CAA / President of Disney), Abstract Ventures (Hippo Insurance, Ripple), FJ Labs (Stripe, Flexport), Porsche Ventures, + other existing investors.

DEAL

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Playbook is raising an oversubscribed $8m Series A priced round on a $20m pre-money valuation. This fundraise will give Playbook 24 months runway. The founders plan to raise a $20M Series B in late 2021 / early 2022 with a valuation target of $100M. Funds from this round will be used to achieve the following milestones before they raise their Series B:

1. Grow to $20M GMV run rate
2. Grow to 175,000 subscribers
3. Grow to 1,000 creators on the platform

This $8m round is now oversubscribed and our $150k investment will be the last check in. We will be closing on 7/20.

STORY

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Prior to Playbook, Jeff Krahel, CEO, helped build an illiquid special situations fund (a private equity fund) growing the company from $25mn to over $100mn AUM investing across financial services to technology. Jeff also played college sports and was an avid triathlete.

Jeff and team conceptualized Playbook primarily from two key data points. (1) At his fund, Jeff looked closely at investing in MasterClass’s first round (fund invested in Uber, etc) - it was clear to him that the world was going to independent contractor marketplaces and everyone from celebs, teachers (Udemy), and drivers were going direct-to-consumer with the monetization of their content or service. (2) From personal experience working with D1 coaches and high-end triathlon trainers, it became clear every coach, trainer, yogi was going to scale their time, by going direct to consumer with their content and they needed the business tools to do it (they needed seamless software tools to create and distribute content to their communities, scaling their time and income).

MARKET OVERVIEW

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The fitness market/fitness apps are 99% media companies (not software platforms for independent contractors) they are not building tools for the instructor. They have a film studio with heavy production costs. Trainers have to live locally and come into the studio to film content - meaning no scale on the supply side (instructors)

Playbook is the only mobile marketplace in the world (Udemy, teachable, Skillshare are all web platforms needing a laptop to create content) and the only two-sided platform in the fitness space. To date, they are the only company that can truly scale the supply-side of the business.

By offering a business in the pocket” for the supply-side, Playbook enables a global creator base the opportunity to transition more of their income to digital at an accelerated pace. The TAM is large and global. If you just isolate personal training in the US, 300k instructors generated over $10bn a year in revenue. Gyms in the US generate $30bn a year with personal training only having a 3% penetration rate.

THE PROBLEM

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When it comes to exercise and fitness, consumers care deeply about their instructors. The instructor is the revenue generator for industry. However, no one is building content solutions for the instructor, unlocking them to run their own business, scaling their time and income.

The model today “shackles” the instructors - owning their content, not letting them engage with the consumer, telling them the content they have to create and when. This problem has only been exacerbated by COVID. Today, a digital solution for fitness creators to run their business is an absolute must. This is where Playbook comes in.

PLATFORM OVERVIEW

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Product demo video: https://vimeo.com/411002812/85be21d85f

Playbook is a two-sided marketplace (similar to an Uber - rider experience, driver experience).

The consumer app is one of the highest rated apps in the app stores with 5k+ reviews at an avg. of 4.9 stars. Playbook has 36k subscribers today and is expecting to have 50k subscribers by end of year. With a subscription of $15 / month or $100 / year, the consumer gets unlimited access to the entire library of 17,000 classes.

The Creator app is the core focus of Playbook (90% of their time to date has been on the creator tools and payments system).

The creator app enables the creator to:

• Create, upload and edit content (programs, workouts, classes)
• Manage and story content in CMS
• Data and analytics from content to subscriber
• Direct deposit bank account
• Customer engagement - responding and marketing tools with community
• Training and customer support

BUSINESS MODEL

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Today, all of Playbook revenue comes from taking a 20% cut from the subscription incomes. Consumers can pay $15/month or $100/year. Playbook takes 20% off the top, then credit card processing fees, then the creator takes the rest 75%-78%. The consumer always has unlimited access. However, the money is distributed through two model (1) First click attribution and (2) Engagement Pool.

First click attribution - is when a creator brings in the consumer via their landing page. The creator locks in the consumer LTV, 80% and the consumer has access to everyone else on discovery.

Engagement pool - when a consumer comes directly through the app store, not via a seller. The consumer’s money goes into a pool where the creator earns money based on the amount of time the consumer spends watching their content. Playbook takes 20% from the pool today (will gradually increase as money is spent on consumer acquisition).

BUSINESS PERFORMANCE

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Business Metrics Overview

• Current revenue run rate: $3.6 GMV ARR (exp. $6m GMV ARR by end of 2020)
• Subscribers: 36,000+ (8k subs in 2019 / exp. 50k subscribers by end of 2020)
• Creators: 200 w/ waitlist of thousands (exp. 500 by end of 2020)
• Gross Margins: 20% (increasing with time)
• Burn: $50k - $70k
• Churn: Keeping over 30%-35% of monthly subs after 12 months (top quartile retention and they pay almost nothing per user given supply-side acquisition). Before migration to Stripe via monthly promos (to bypass app store fees, putting 30% more in creator’s pockets), Playbook had ~60% of their users on annual subscriptions. With the Stripe migration complete, it’s clear Playbook can get back to 50%+ of users on annual subscriptions.
• Playbook is on track to grow 600% YoY, starting the year with 8k subscribers, expected to end the year with over 50k.

MARKETING STRATEGY

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One of the most compelling parts of Playbook is the supply-side acquisition strategy. To date, they have spent $0 on consumer acquisition. They have primarily grown through letting creators on the platform, monetizing their off-line and on-line communities.

Playbook sees the majority of marketing dollars for the Series A going to the supply side via “performance based contracts”. They price creators based on their expected subscriber revenue which is analyzed from their total reach, their total engaged reach (active community) and email lists -- then benchmarked against creators on the platform with similar profiles. From there, they offer creators guaranteed cash against their subscription income to get them kick-started on the platform.

For example, Kenzie (above) is guaranteed $5k per month. If she made $4k in month 1, they would pay her $1k given the $5k guarantee. Month 2, she earns $7k, they pay her nothing. This has allowed Playbook to become profitable on their creators either instantly or within 3 months. This enables them to quickly attack the supply-side of the industry while they develop their brand. Also, this strategy drives thousands of creators to organically apply to the platform - when they see “Kenzie” is on the app, they become intrigued and apply. There is a nice viral loop that has been demonstrated, further offsetting the supply-side CAC.

USE OF PROCEEDS

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Playbook will use the $8M continue to develop the product offerings and grow out the team. The founders plan to invest in the engineering team, setting up three small teams internally to focus on each part of the platform technology (consumer, creator and infrastructure). On top of engineering, Playbook will make key hires in operations, sales and marketing.

The founders plan to raise a $20M Series B in late 2021 / early 2022 with a valuation target of $100M. Funds from this round will be used to achieve the following milestones before they raise their Series B:

1. Grow to $20M GMV run rate
2. Grow to 175,000 subscribers
3. Grow to 1,000 creators on the platform

COMPETITIVE LANDSCAPE

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Playbook views platforms like Pateron and Twitch as the main potential threats should they decide to want to attack the vertical. At this moment, they are not going after the space. There are other fitness apps like Sweat, Plank, Fitplan, and others, but they do not have any scale on the supply-side. They work with a handful of trainers and largely create VOD’s inside an app experience. Playbook’s focus is on the supply side software and believe their opportunity-set is grossly larger than the traditional fitness app, more in line with the direction Patreon and Twitch are heading, but with a unique focus on fitness and training.

EXITS & ACQUISITIONS

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Playbook has been approached multiple times for acquisitions, most notably & recently by ClassPass, but have turned down acquisition offers. The Playbook founders admittedly believe there is a multi billion dollar valuation / exit opportunity here and the fitness space is heating up with massive valuations, exits, and acquisitions.

Peloton - $18B public company

Mirror - acquired by Lululemon for $500M (last month)

Tempo - Raises $60M Series B (last month)

TEAM

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The Playbook team is a scrappy and driven team of 11 led by founders with strong and diverse experience.

CONCLUSION

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Here again is why we are excited to have secured allocation in Playbook…

TIMING IS NOW: Playbook is the Etsy, Shopify, or Patreon of the fitness & athletic market - all the independent contracts in this space are looking for solutions to monetize their content and coaching. Covid has blown this opportunity wide open;

GROWTH DURING COVID: With gyms closed and fitness classes cancelled for the foreseeable future, Covid is pushing Playbook’s thesis forward on a global scale. Every creator, coach, instructor, and gym needs a digital solution at this time and Playbook is the best equipped to enable these creators to build reliable subscription income revenue from their content;

SCRAPPY FOUNDERS MINDSET: With $0 spent on paid consumer acquisition and a low burn of ~$50k / month, the Playbook team has built an incredible two sided marketplace for the fitness ecosystem with a consumer facing app and a creator app (similar to how Uber has a rider app and driver app);

IMPRESSIVE SCALING TRACTION: Playbook has already grown 500% this year, currently at a $3.6M GMV run rate w/ 36k subscribers and expecting to be at a $6M GMV run rate w/ 50k subscribers by the end of the year;

MASSIVE MKT + EXIT OPPORTUNITY: The industry is evolving rapidly with the transition to digital. In the US alone, spending on big box gym memberships is over $30B / yr with only 3% of members purchasing personal training at $10B / year. With the tailwinds of growth from COVID, Playbook is going after both of these massive market opportunities. The Playbook founders admittedly believe there is a multi billion dollar valuation / exit opportunity here. They’ve already received acquisition interest, but have opted to turn it down;

STRONG ROSTER OF CO-INVESTORS: e.ventures (early investors in Groupon, Bird) is leading this round with $5m investment, w/ participation from Founder of CAA / President of Disney (Michael Ovitz), Abstract Ventures (Hippo Insurance, Ripple), FJ Labs (Stripe, Flexport), Porsche Ventures, + other existing investors.

CO-INVESTORS

• e.ventures
• Abstract Ventures
• FJ Labs
• Former President of Disney / Founder of CAA (Michael Ovitz)
• Porsche Ventures
• Former Head of Growth @ Uber (Ed Baker)\
• The Fund

PAST FINANCINGS

Note from Mana Ventures

$2.5M from a great group of investors...

- Ed Baker (former head of growth at Uber) - Daniel Graf (former head of product at Uber) - Ryan Hoover (Product Hunt founder) - Alex Chung (Giphy founder), Renaud Visage (EventBrite co-founder) - Melody McCloskey (StyleSeat founder) - Brendan O'Dricoll (growth at Bird) - Sam Rosen (MakeSpace founder) - The Fund - One Better Ventures - Uphonest Ventures