Passport Asia Co-founder Gene Yap

Passport Asia Co-founder Gene Yap

Singapore-based Passport Asia, a mobile app launched in June that gives fitness buffs in the region access to hundreds of gyms and classes in more than eight cities and counting, told e27 that it is looking to raise a “seven-digit” funding round.

ClassPass has already done this across the US, but Passport Asia thinks it has  first-mover advantage in the region. Local competitor KFit, which we exclusively reported had launched earlier this year with a similar offering, is still web-only.

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But while KFit won’t be able to benefit yet (an iOS and Android app is reportedly due soon) from additional mobile-only features such as live GPS integration within the app, the fact that it’s the latest venture from former Groupon Malaysia Founder and serial entrepreneur Joel Neoh means it’s definitely a competitor to be taken seriously.

So, what is Passport Asia offering?

When we caught up with Co-founder Gene Yap earlier this month at the Fullerton Bay Hotel in Singapore, it had already gained significant traction and boasted impressive offerings for an app that was barely five weeks old.

Like ClassPass, the idea is that for a single monthly fee users will be able to access 20,000 classes from 250 gyms and studios (at the time of the interview). Price plans come in at S$59 (US$43) for entry level membership that gives access to just four activities per month, or unlimited sessions of any activity will set you back S$99 (US$72).

passport-asia

Naturally there is the rhetoric and sales pitch of prohibitively expensive traditional gym costs in developed Asian cities such as Singapore (popular clubs like Fitness First, for example, cost S$150 per month on a contract basis), as well as the trend towards healthier lifestyles enabled by technology (the growth of wearables, health apps and fitness trackers cannot be contested).

But what is most interesting is that Passport Asia is entering the market at just the right time as the region’s growing middle class becomes more tech-savvy, and at the same time higher expendable incomes and a changing consumer mindset make spending through mobile apps more commonplace.

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Facts and figures

The app has clocked up more than 11,000 paying subscribers, and Yap says the venture is already profitable (even after operation costs, which is very impressive). The team, with backing from three undisclosed investors linked to McKinsey, Temasek and a local media venture, previously raised S$300,000 (US$220,000).

The startup is now at 40 staff and in eight cities: Singapore, Kuala Lumpur, Jakarta, Hong Kong, Shanghai, Seoul, India (Delhi, Mumbai, Bangalore), and Australia (Sydney, Melbourne).

“The inherently social aspect of Passport Asia makes it easy for friends to organise and schedule group classes together,” the company explained in a release. “Links to classes can be shared via instant messaging services, e-mail or social media and bookings can be made instantaneously, allowing users to workout with like-minded members who share their passion in spinning, Muay Thai or golf.”

Demand vs supply clash

The Passport Asia app

The Passport Asia app

To avoid a demand versus supply clash, partner clubs are able to set a quota for the number of slots available to the app’s users, while at the same time Passport Asia says it ensures that “classes are available to members every time they book” through its algorithms.

Yap said that he and his Co-founders cut their teeth at the likes of McKinsey, Harvard, Procter & Gamble and Accenture, and have collectively been involved in around 20 startups (not as founders per se, but in advisory roles and so forth).

“I attribute [the success] to the market trends right now,” Yap said in an interview with e27. “It took some time for the vendors to come round to the idea, but it was easy when they saw the amount of money it could bring.” According to him, vendors generated as much as S$100,000 (US$73,000) in the first five weeks alone.

To operate in markets like Jakarta, China, Japan (coming soon) and South Korea, the app’s language has been localised. But questions remain: a strong start and financial backing is not in and of itself indicative of execution, scalability and long-term survival. At the same time, it may be misguided to think this is a winner-takes-all ocean.

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Staying fighting fit in a competitive market

How will Passport Asia stay competitive when Kfit, for example, pushes out its own mobile app? Would US-based ClassPass ever look to expand into Asia with all that potential? The GrabTaxi versus Uber battle currently ongoing in ASEAN is a great example. While GrabTaxi may have had first-mover advantage, it’s now very much fighting an uphill battle against the foreign competitor that has the benefit of a global presence.

But most importantly is this: how long will it take for a shift in consumer mindsets — already well on the way — in this part of the world to reach that critical tipping point whereby when we move to a new city we pull out our Passport Asia app before heading down to the local gym chain?

What is brand loyalty worth in the day and age of sharing economies? Do I want the comfort of my regular trainers and workout facilities or do I want convenience, choice and a cheaper price point that is available across markets?

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And for just how long can the established giants in the fitness space resist changing consumer behaviour? How will they respond and pivot? How long until Fitness First has to be on an app like Passport Asia just to survive? I don’t believe that time is upon us just yet, but there is no doubt a disruptive decade is ahead for businesses not embracing this transition into the sharing economy.