Why Private Equity Bought HYROX | Is Oura Really Worth $16B?

Hello and welcome to the Market Maker podcast. And this week, after a summer of indulgence, Stephen and I are going to be health maxing. As with most things, starts with data. We're going to do a deep dive into fitness wearable Aura's upcoming IPO and try to figure out whether Aura stands up against scrutiny or is it just another pelatin? After data, health maxing is all about joining a tribe. And what better tribe in 2026? I'm sure it's been polluting. If you're a middle-aged man like me, your Instagram feed in 2026, and that is Hy Rocks, the latest competitive fitness craze to be invested in by private equity. So, Steven, for you, why why are we health maxing here? Why are we health maxing? Well, anyone that's looking at the video uh will probably be [laughter] why we're healthing. Yeah. Oh my god. No, I've just come back from holiday. I was in Corfu for a week. So, shout out to uh to KFU. It's an amazing place and I had all of these ambitions of getting up early and going for a morning hike. Uh maybe even a maybe even a morning run, swim. I just ate and drank for a whole week. So now I'm returning and I'm ready to health. Look, I'm ready to talk about health maxing. Whether I'm ready to commit to health maxing, I don't know. We'll find out. Quick question then. Was anyone with you on holiday hyroxing or wearing an aura ring to start with? I tell you, I tell you what, no. No one on holiday basically got they went from kind of their beds to a sun lounger to the pool to get a drink to the pool to a sun lounger. So, there was no aura rings in sight. There was no sled pulling or sled pushing or ski thingies or whatever high rocks people do. Um, it was very sedentary. >> Okay. Well, look, let's get into this aura story. uh because I've been aware of them it feels like for a couple of years now because there is someone I know who's a highf flying exec and she's been wearing one of these things since I think version one. Um she's been keeps telling me how amazing it is. So the filings come out. Let's let's have a look then to unpack this initially from that. Are we talking hardware here or software or is it a little bit of both? >> Yeah. So Aura is a classic razor blade and razor business model that I think we've discussed previously on the podcast and it is both hardware that makes a profit that isn't a loss leader hardware in the form of a nice quite aesthetically pleasing looking ring. It's it tends to be thicker than a normal kind of wedding band that you would see. And to anyone with the eye that is attuned to these things, you will be able to notice very quickly that someone is wearing an aura ring. And we'll talk about the status and maybe even the virtue signaling of that later on. But these aura rings, they track loads and loads of stuff. They're much better at tracking your vitals, whether it's your sleep score or oxygen saturation through to skin temperature trends and blood oxygen levels. It's really good at tracking that kind of stuff and it has become more and more popular amongst the aspirational relatively welloff fitness and wellness enthusiasts nay obsessives. And I know and you'll know plenty of people like this. I know people that just wake up every day and check their sleep score. It's as if they cannot rely on the signals of their own body. I know when I've had a bad night's sleep because my daughter's woken me up and and whatever. >> Have to check and they compete. >> Yeah. No, I think I've had this I think I've mentioned this on the podcast before cuz I've I've got uh well, I've not got it on today, but I normally wear a garment and actually I just have it on all the time and the sleep score. I find it actually much more psychologically negative reinforcement where I wake up and like you, I've got relatively young children and so you go to bed too late cuz the kids go to bed too late, then they get up super early, then you've not had enough sleep and then I wake up feeling pretty rough. I look at the watch and the watch goes, "Yeah, you're right. [laughter] You're an idiot." And I go, "All right, thanks." And then my day is off to a flying start. >> Yeah, absolutely. Absolutely. And I'm sure all of those people that listen that don't have kids are not looking forward to it if that if that day does arise. But anyway, so this company Aura, this is it's a really interesting tech IPO. So they've just released their S1 prospectus for a US IPO. We don't know exactly how much they want to raise or at what valuation, but Bloomberg has reported that they want to raise up to $3 billion at a $16 billion valuation. And that's still yet to be confirmed. But this is another case of a European tech company, a Norwegian tech company indeed, that is heading across the pond where the money is and IPOing at a at a valuation that they probably wouldn't be able to get if they IPOed maybe in in Germany or France or or here in the UK. And then in terms of lining up this this move, who's who's on the ticket here? Who are we talking about in terms of both from uh uh investors point of view? I'm sure this has been a bit of a journey for the firm and then also who's advising on the actual deal in its listing itself. >> Yeah. So is a it's a fascinating company. We're going to get into the business model and why it has been successful where so many other hardware tech consumer companies that aren't Apple have failed so miserably. But this company has has increased in valuation. It's had a 17x valuation increase in the last 5 years. So again for a AI adjacent company i.e. It stores a lot of data and does clever things with it, but it is a hardware and a subscription company. To have that sort of breakout and on a profitable basis, and we'll talk about that in a second, this company is increasingly attractive to the investment community. >> So, yeah, go for it. A quick Yeah, quick question. I wonder what the total addressable market is because as they've grown I al always think that that a lot of people I see more people wearing is it a loop band than I do an aura ring and then I see more people wearing a garment than I do wearing a loop band that is more than an aura ring. So I wonder what that mark the market size looks like and how much of the market for data health tracking data the Aura has. >> Yeah. So Aura says Aura states that it is only captured just under 2% of the total addressable market for wellness related wearables which includes your garments and your loops and your even your Apple watches as well. But I think what sets it apart in a category of its own is the fact that it's attached to your uh to your finger and not your wrist. meaning that you can get a much better data, but b the average person wears their ring 23 hours a day, right? So, I wear a a pretty old gar and I take it off at night because I don't like wearing a watch at night, but I don't take off my wedding ring at night. I wouldn't take off my aura ring. So, it's got that unique selling point that goes, "All right, you know, and you care a little bit about health and fitness, so you've got a Garmin. Steven, you care a lot about health and fitness, and you've got an Aura, so that kind of puts you in maybe a slightly different category." >> Okay, there are that makes sense. But yeah, sorry I interrupted you. We're just in your flow of telling me about the the investors in the firm. Well, look, I mean, barely an episode goes by where I don't speak about basketball players in the context of investment just to keep you happy. And >> you're just a super fan. This is like these are Easter eggs are dropping every episode. You're just >> It's brilliant, isn't it? Yeah. So, at back in 2018, this company's been around for a while, right? it. I think it was founded in 2013. So, it's not a kind of breakout in the way that some of the companies that we talk about are, but back in 2018 during a seed style round, Will Smith and Shaquille O'Neal got him the Shaq. Is that what they call him? >> Can I call him? >> Shaq is just he's into everything, that guy. But yeah, and what? So this is pre-slap Will Smith, not post slap. [laughter] >> This was well and truly pre-slap Will Smith. Yeah, absolutely. Yeah, I think I'm not sure he gets as many phone calls as maybe he did. Um, but anyway, so lots of famous investors, but also some VCs, raised quite a lot of money over the last 5 years. Now is the time to IPO and, you know, realize some upside for the founders, but also for the investors as well. There are 18 underwriters on the ticket. Some big names, Goldman Sachs, Morgan Stanley, JP Morgan, Bank of America. Some slightly smaller names like Needam and Co. which I'd actually, shame on me, but I'd never heard of so focuses on growth equity firms, which kind of makes sense. But then sneaking right at the bottom, and I love the way that these S1 prospectuses come out. The lead the lead banks are at the top. Lead left is usually the one that's the main arranger. They're in a bigger font. Next tier down, I'm going to say maybe size 10 font. Next tier down, the Raymond Jameses and the Canac Genuities and the Needamman Companies, they're probably size eight font. And at the very bottom, propping up the stack of investment banks in size six font. I'm going to put it Robin Hood. Robin Hood. I'm laughing because I had an eye test at the weekend. It just reminds me of an eye test looking at it. Can you read the bottom line? Is that Robin Hood? It can't be. No, it is Robin Hood. Why is it Robin Hood then? This is really, really interesting. So in June 2026, so a few months ago, Robin Hood uh was allowed was given permission, sought permission and gained permission to be a uh to be an underwriter. So Robin Hood securities can underwrite in the same way as any other investment bank securities firm can do. Now, previously, Robin Hood would get access to IPOs via the underwriters. So, they would be at the behest, say, with SpaceX. The big banks would get all of the all of the money, all of the allocations for a big IPO, and then it would be Robin Hood going, "Hey, can I have a slice of that, please?" Right? They would be, you know, they wouldn't be at the table as it were. So becoming Robin Hood securities and getting a seat at the table and even though they're size six font and they will have a tiny allocation in this IPO, it will go straight to their wealthier retail clients on the Robin Hood platform. And this is all part of Robin Hood's strategy to become a leading tech first wealth manager super app kind of thing. And it is really interesting to start to see these tech companies spread out whether it's Revolute or whether it's Robin Hood into more what we would call traditional investment banking territories. And I would I would expect to see this more. If you think about the target market of Robin Hood versus the target market of Aura, there's going to be pretty big overlap, right? I think there are 29 million Robin Hood customers. So, probably wanting a piece of the Aura IPO. So, this kind of makes sense to cut out the the middleman, the Bank of America or the Goldman Sachs and say, "Hey, we are going to be the underwriter. We are going to be the allocator and we're going to go and we're going to take control of that process. You said that there's 18 underwriters. 18 sounds like a lot for this sort of size deal. What would be the the science behind that cuz I think it was SpaceX when we were like it was something crazy like in the 20s or 30s. But that's understandable cuz it's one of the largest in history. Here it's 18. Is there any anything you read into that? Yeah, I I wouldn't I wouldn't read too much into that. 18 is a lot and it is we saw I think 18 or 21 maybe on the ARM IPO a few years ago which was closing in on double digits billions raised. This is still a big IPO. I think we can get very very distorted by the SpaceX IPO but $3 billion for an IPO is a lot of money, right? especially as we as we've mentioned and as you've mentioned on on on the pod with peers, there is only there are a lot of big IPOs in the pipeline, right? And there's been one already this year. So, the appetite for IPOs, if I've got if I've got a certain allocation within a financial year or a calendar year that I want to put towards IPOs, you know, I probably put quite a lot into SpaceX. I'm probably saving some dry powder for anthropic. Maybe I won't have quite so much as an asset manager. So, I need to cast the net a little bit wider and therefore getting more of these firms on the docket, more of these underwriters, more of these investment banks. It kind of makes sense. And again, this is not some kind of spray and prey thing like every one of these banks is going after the same asset managers. They will have their books. They will have their networks. they will be appointed because they've got access to certain investors that have historically invested in similar type companies or have access to the retail market like Robin Hood and therefore it will be a very strategic process. So 18's a lot but it's not crazy crazy. All right. Well, look, you mentioned earlier that the company has had a 17x valuation u in the past 5 years in terms of improvements. So I guess that kind of rings in my head of the journey of this company like the entrepreneurial spirit within us both I'm sure is like okay so that's an impressive amount of money that they're going for this time round as you said easy to get uh slightly warped in the context in the shadow of the SpaceX um IPO that we saw so history how did that come about who's involved and then how have we arrived at this case I'm also particularly interested in my assumption is that it's that kind of middle class highly affluent person who's into has disposable cash to buy this type of hardware subscription service tracking data and what does that demographic look like? >> Yeah, absolutely. We'll get into the into the business model cuz it's a fascinating one especially when you compare it to a company like Pelaton which we've spoken about previously but the the company was founded in 2013 by three co-founders all of whom went to the University of Oslo. So this is Peter uh uh Latella. Sorry if I've done that name wrong. uh Carrie Kavala and Maru Costcella and a couple of whom were actually ex Nokia in the naughties. Lots of listeners won't even remember Nokia, but they were a big deal. Um and they were a huge conglomerate working on things that weren't so massively different to the Aura Ring. So founded on in 2013 under the thesis that health wristbands don't monitor physiological signs like HRV, like temperature, like respiration. They don't do it as well as maybe a ring would. So it's a pretty simple thesis. And they've been working on building this product, the Aura Ring, from 2013 to 2020. That's why we wouldn't have heard of this company for the first 7 8 9 years of its existence. It was actually just working. It was in R&D lab prototyping iterating mode. And one of the interesting parts of this journey was when it partnered in uh in the late 2010s with the NBA to provide players and coaches with these rings to detect early signs of illness, of fatigue, or whatever it might be. I mean, what a genius bit of marketing that is. You're at it again, Stephen. Stop talking about the NBA. >> Yeah. Yeah. Maybe I wish I would maybe I wish I was a player. No. >> Yeah. You're you're the Larry Bird of PO finance podcasting. >> Um, but it's amazing. What what a what a clever bit of advertising, right? You know, and this is this is, you know, this is not a totally new playbook to put to put products in the hands of people that have that have got a public platform, but to put it in the hands of NBA players who play a lot of games that have stresses and strains and injuries and illnesses and to say that it works and to get people like Shaquille O'Neal investing in the company, that is a genius move and is set the company up for what we would probably call the era of health maxing to use that horrible uh horrible word or horrible combination of words. It set us up for that, right? And it seems like this company is right place, right time has got that magic product market fit where you have produced something from 2013 to 2020. You've been working in the lab in the manufacturing warehouse figuring it all out and you've put something out to market at exactly the same time as we're coming out of CO. We want to look good. We want to be healthy. We're a little bit obsessed about our health and along comes the Aura ring and absolutely smashes it. I I feel like I've been pitched here by the Aura Founders team from you. I feel like I feel like I'm bought in on your mission statement. So, what what are your numbers? >> What are we talking? >> All right, here comes the pitch. Well, look, I'm going to give you the business model and then we'll go into some numbers. So, they sell the Aura rings for about 400 quid. So, I think the Aura 5 ring retails for between 4 and 500 depending on the spec. And then they charge a subscription. So, this is going back to the Razer and Blades model. So subscription £70 per year or $70 a year six or six per month. So but at this stage 77% of its revenue is generated from its hardware from the aura rings but the growth is really really coming in the subscription tier which gives you access to 50 different types of health analytics and all of that kind of very very nerdy stuff. Uh very very nerdy stuff that the gross margin of the subscription business is 89%. Absolutely brilliant gross margin, right? It's got $240 million of membership revenue, which is up 120% yearonear. 94% of Ring activations, I bought a Ring, convert into a paid subscription. And then there's a 85% uh customer retention on the subscriptions. So this is I mean these are pretty amazing numbers. And all this and all this transpires all this kind of translates sorry into a set of financials that are pretty compelling. growth rates, gross product margins, the fact that it is profitable, which is not something that we talk about a great deal on this podcast at the moment. Uh, it is pretty compelling. I'm still I'm still banging the drum here, aren't I? >> You are indeed. You're evangelical of uh of Aura, but there sort of two questions here that I have. So, for one, uh what is the lifespan of the product? I.e. the £400 I need to outlay for the hardware. Is that good? You know, like when you buy a iPhone, it's kind of that that kind of legacy effect where, oh, the new one's coming out. All of a sudden, my update has killed my phone. I need to upgrade the phone. Like, I wonder what the lifespan is of one of these and how much they need to roll that over. And then secondly, I remember you and I talking about uh when Reddit IPOed and you were very bombastic about the data to feed into these labs, these data models that just consume hoover up information of Reddit is a treasure trove of that is the fact that the the technology here because it is more sophisticated captures more then is there also a a potential revenue dream that's yet fulfilled where they could sell on this data to the big tech giants who are looking to then align with insurers and all the rest of it that hasn't been explored yet. >> Yeah, absolutely. I think just going back to the [laughter] uh do you need to buy this every couple of years point, I think the the pricing and the positioning of this business is pretty clever. So 400 quid, right? That's a decent amount of money, but it is not, and we'll go on and talk maybe about Pelaton in a minute, it is not maybe Pelaton hardware, £2,000, whatever it might be, every 3 years, if you want to, if you would say that that's the average lifespan, £400 every 3 years, you know, that's doesn't seem like that big an outlay. And more importantly, you spend 400 quid and then you tell me to really get the most out of this product, I need to just spend another six pounds a month, which comps to my Spotify or my Netflix or whatever it may be. And if I've got disposable income, of course, I'm going to do that. So quite frankly, even though the ring itself, the hardware has a gross profit margin of about 34%. And is the majority of the revenue at the moment, quite frankly, you're almost wanting to you're almost getting to that point where you're like, "All right, let's just make sure as many people have these rings on their finger as possible." and maybe there's a a tradein scheme for the upgrade or whatever it might be in order for them to stay on the subscription because that is the cash cow. Is there any like comparable with say Tesla and uh autonomous driving where because they have a bigger fleet of vehicles out in the field gathering data. You mentioned earlier that because of the natural uh less friction between wearing a ring as opposed to a wristwatch then or a strap that you're just wearing it more. So is it similar that they can train effectively populate their model faster because they're just accumulating at the rate of knots basically faster than their competitors? >> Yeah, I think I think you've you've given two very interesting comps or parallels, Reddit and Tesla. And I think Reddit's probably a closer parallel. So the firm, as we've said, has has I mean the average person wears an Aura ring 23 hours a day, right? It tracks tens if not hundreds of different vitals and it is logged over 42 billion hours of biometric data. Right now, the reason why I say that this may be a little bit closer to Reddit than Tesla is if I'm Aura, what am I going to do with that data that is going to transform the product offering? When it comes to Tesla, I'm going to use that data to transform my product offering. Move from I've got to drive a car to I don't need to drive the car, right? Reddit. It's got this data and it's selling it to a third party who can use it in various different ways. At the moment, I think that that's closer to Aura. I've got all of this data from millions of users who wear it 23 hours a day. I don't quite know how that data is going to improve my product beyond just giving slightly better health advice maybe or notifications or whatever it might be. And that will help. But moreover, this is 42 to 42 billion hours of biometric data that you know any AIdriven pharmaceutical drug discovery healthcare company would absolutely love to get their hands on this data that now spans 5 6 years and is starting to become meaningful as a data set. So yeah, I mean there's value there in this in this age of proprietary data being one of the great inputs to this AI buildout. >> Anything else do you want to express about the business model because I do want to talk and ask you about Pelaton. >> Yeah. Okay. Well, no, let's let's let's get on to Pelaton because it's a really good a really good comparable just in terms of the business model. >> Yeah. So with Pelaton I just I forget you're a Pelaton owner. No. >> Oh, you were a >> No, I am a No, no, I have not sold it off. I am a Pelaton owner and a Pelaton investor. >> Oh, okay. >> Now, in my notes, I've given you a a screenshot of the share price of Pelaton over the last 5 years. All I need to tell the listener is that it's down 95%. And this is for me from a learning perspective. This has been so such an instructive, you know, even when you lose money, you still learn something, right? Like I was using my Pelaton three or four times a week. I thought it was an absolutely brilliant product and I still do. I love it. I think it's fantastic. It works extremely well. It's sticky. You know, the monthly subscription's not too high. I like the instructors. I was looking at my analytics. All was well. So, I invested. I was like, well, if it's a good product, it's got to be a good investment. That is not true. [laughter] Top tip. You can have a brilliant product, but it can be a terrible, terrible investment. >> And so, what so what was the fundamental flaw then that happened to Pelaton? Cuz I remember at the time they were going >> gang busters. And I'm sure we'll get to this as an overall conclusion to this episode. It seemed like this was the greatest thing ever at the time. and it had the growth rate I remember to support that narrative a few years ago. >> Yeah. So there's a number of reasons why Pelaton and Aura might well have slightly different characteristics. They're the same fundamental business model. Issue hardware, sell hardware, have a subscription off the back of it. Now, the first difference, the first problem with Pelaton's business model that Aura doesn't have to the same extent is that Pelaton's hardware division basically makes no money. It's got a gross profit margin on selling the bikes and the treads and things like that of about 13 14%. Compare that to Aura, which about 35%. So even as a standalone business, Aura's gross profit margin on its hardware is okay. It's not very exciting, but it's okay even without the subscriptions. Now, so this is where it gets interesting to justify the valuation. I think we said we're going they're going out and raising $3 billion at a $16 billion valuation, which would be I think 11 times revenue, right? That's a high valuation for a company where the majority of revenue is from its hardware. In order to grow into its valuation and in order to be worthy of that 11 times revenue valuation, Aura really really needs to keep growing its subscription service very very very quickly and for a sustained period of time. Right? The whole of this business model is based on and I think Profit did some analysis that said they have to reach approximately 25 million subscribers, 10x as many as they've got at the moment in order to justify the valuation that we're coming out with. Now, that was a very similar story for Pelaton, right? This valuation was only justified the kind of 2020 2021 2022 valuation if the subscription numbers kept going up and to the right. But they didn't. [laughter] They tailed off. And I'm just looking at their total revenue. Um, that's gone from $2.8 billion, this is Pelaton, in 2023, to $2.4 billion by 2026. So, this is really instructive for Aura. Like, yes, they're a better company because they generate a higher gross profit margin on their hardware relative to Pelaton, but my gosh, they still have a lot of growing into their valuation to do. And as we saw with Pelaton, if something else comes along, I don't know whether GLP1s are going to have an impact on this for the positive or the negative. Something comes along and that subscription growth tails, then suddenly this is looking like a very expensive company at IPA. >> What roughly does that growth rate look like then on purely on the subs paid sub perspective in the last backward-looking 12 months? Do we have that stat? Yeah. So, it's I think it was 112%. >> Okay. >> Growth rate on the subs. >> And what was do we know what that is from? Like what what sort of uh that sounds impressive, but how much was it up the year prior? >> So, that was off a base of $120 million. So, it's gone from about $120 million. I don't know in terms of the actual numbers of members, uh $108 million to $240 million. So, you know, off a pretty low base, you know, $100 million for a $16 billion valuation is kind of chicken change, right? Um, so yeah, you have to believe the story, right? But I'm going to give you one more reason why I'm lending tending towards believing the story, and I'm going to give you a quiz. All right. Which of the following celebrities has not been spotted wearing an aura ring? Number one, Prince William. Number two, Jennifer Aniston. Number three, Lady Gaga. Number four, members of the K-pop sensation BTS, who I know you you absolutely love. >> Oh, mega fan. Super fan. Big fan. Okay, so all right. Prince William, Jennifer Aniston, Lady Gaga, BTS. [clears throat] So, I would I think I've seen Prince William wearing one of these things. I feel I feel like fairly confident of that. He strikes me as the sort of guy, the right demographic, the right level of social setting where yeah, he'll be rocking that. And he's trying to persuade people that he's young and down. So, yeah, Prince Williams in. I would say BTS. I don't know a lot about K-pop, but what I do know is whenever I see uh K-pop guys, they tend to be laden with jewelry. So, an Aura Ring probably wouldn't look out of place too much. Um, and it being tech orientated trying to sweep up that lower demographic. They're in. Big Willy's in, BTS is in. So, that leaves the ladies, Jennifer Aniston, Lady Gaga. Last time I saw Jennifer Aniston, I mean, yeah, I mean, she still looks incredible. So, I'm imagine she's well into the the whole wellness. She is health maxing, baby. So, I'd say she's probably in that leaves Lady Gaga. And I'd say probably Lady Gaga out of the four is probably the coolest perhaps. And I don't I don't actually think aura is that cool. I don't think it has that much of a coolness factor >> if you're wearing it. So, I'm going to say Lady Gaga does not wear an aura. >> So, I agree with you on the coolness factor. I think partly because if you've had a couple of drinks the night before, it tells you off. Uh, which I'm I'm I don't want to be told off for having a glass of wine at night. Um, you were almost right, but you got the wrong prince. So, Prince William has not worn well, >> according to my research, my extensive research, Prince William has not worn an aura ring, but Prince Harry has. >> So, there you go. >> Harry Harry always spoils things. >> He always does. I know. I know. Let's not go there. >> Okay. >> All right. Well, look, I mean, you everything so far has sounded um quite persuasive, I would say, in terms of the uh story. So, as ever, we like to give a balanced opinion on things. So what would be some of the the risks then looking forward? >> Yeah, I think the risks are I mean there there's a bunch of different risks that they it's always worth going to the S1 and seeing what the company puts as risks and often they're pretty generic. I would say that the biggest the biggest risk is it doesn't it doesn't grow quickly enough to justify its valuation and that will be a function of competitors getting into the game. What happens if Apple launches a ring? That could happen. Could be quite consequential. Um, it may be a function of trends. Maybe we move away from health maxing in the in in the way that we've moved into it over the last few years. And as you say, Ant, it becomes synonymous with not being cool as opposed to looking after yourself. I think one of the big one of the big reasons why Aura has become such a growth story is because of the signaling nature of the ring. It's the classic, you know, if I put a brand new iPhone down on the table, it shows that I've got the money. If I'm wearing an Aura ring, not only does it show that I've got a bit of disposable income, but it shows that I'm looking after myself, right? So that is kind of relatively high signaling and it's always there on your finger. So if that signaling starts to move against you and what was once cool, whether we reference Doc Martens or Crocs or whatever it might be, what was once cool can quickly become uncool, right? And I think that that beyond all of the other supply chain risks or AI risks or data risks from a business model perspective that's the risk. I also wonder what the macro implications are. It's looking like inflation at the moment in the current context in the short term is going up. And I've heard you talk before about this kind of K-shaped economy. And I wonder whether the consumers of this sit right there where you're probably earning enough, but you're the more you earn, the more the expenditures going out. You're kind of stuck in that middle class trap, but you earn you own all of these products. have all these subscriptions, but then if prices do start going up and particularly food prices, given a lot of the stuff that's going on more broadly globally right now, I I wonder, yeah, this timing of this IPO, I guess time is always of the essence, but whether there's some risk factors around that, you know, there was always can't remember the the situation before in the previous inflation postcoid spike. Do you remember when everyone was like, "Oh the first time in a decade, let's just have a look at these six pound little subs that are coming out of my account and you're like, hang about, there's about 100 quid worth here between Prime, between Disney, between Netflix and all the rest of it. Throw in the ring, throw in the loop, throw in the pelon. >> It does stack up." Yeah, you make a very you make two very good points and I think one acts in favor of war and one kind of acts against it. So yes, we are in this K-shaped economy and quite frankly that if I was Aura, I would be putting my prices up, right? I think that there's a lot of price insensitivity amongst the target market of the Aura customer. Uh it's almost what we would call what economists call the geffing good, right? it becomes more demanded the more expensive that it is. And you would have seen the Apple conference last week where they just raised the prices and released the most expensive phone ever. They can do that. It's price inelasticity from from an economics perspective. But you also mentioned this kind of six quid legacy, you know, I've got a load of subscriptions that I probably need to get rid of. This is what we hope in part depending on what side of the fence you're on. This is what we hope AI can help us with, right? You know, I want I want my agents to be out there not hacking into other places, not hacking into companies, but actually saying, "All right, here are your 30 subscriptions. We've noticed that you've used these five subscriptions, zero in the last 3 months. Do we have your your authorization to cancel them?" Done. Cancelled. So I think this kind of legacy stickiness argument in favor of high valuations for subscription companies is dying or will die a pretty horrible death over the next few years. So yeah, arguments for and against. >> Just a bit of a brain fart idea just came to mind of how Aura could perhaps look to uh create a new hardware product that wouldn't be a million miles away that would capture a new market would be. I was thinking of subscriptions. I just saw my my monthly statement and I was like damn my cat insurance is £55 a month and I was like I mean my cat is getting on old knocking near the 20s now. So that's why it's so expensive. What about a collar for your animal? People love spending on particularly dog owners. Dog I'm a cat owner. Dog owners are out of their mind. Like I mean I know you're a dog owner, but they they love they treat that dog like it's a human being. Cats don't get treated quite on that level. Would you as a dog owner get a collar to then track that to monitor the dog's health so you could get ahead of issues for the better wellbeing of your pet? Are you trying to encourage me to put an aura ring on my dog? >> An aura? No, [laughter] I'm talking to the R&D team here at the Aura HQ. >> Um, I I love where this is going. I think, you know, as a as a teacher of entrepreneurship, what you've done is you've taken a large addressable market and you've applied an existing technology and a willingness to pay. Um, yeah, why not? Wearables for your pet. You've heard it here first. And we'll take 20%. All right. Well, I can tell by your the brevity of your response you're not into that idea. So, we'll move swiftly on and talk about we'll talk about private equity. Everyone always likes talking about uh anything PE related. So, we're talking about private equity though in the context of Hyrox. So, what are the headlines here? >> Well, do you know what Hyrox is? I kind of do and I don't. So much like everyone else, I'd like to be actually educ a apart from very ripped people wearing very few clothes in very poshl looking gyms and seemingly taking spending as much time taking photos of themselves as they are working out. Other than that gripe, no, I don't particularly know what it is that they're doing. >> Is that is that you walking past them on the way to the sauna and the the hot tub? Right. >> No, that's me. That's me walking past the window heading to Five Guys. [laughter] >> Yeah, exactly. Um, I get your point. Um, so for Hyrox to the uninitiated, it is what the founders call and actually this is on the website. Hyrox is fitness racing. So the backstory of Hierrox is the founders who are ex olympians, gold medals, fitness people basically went into their gym and thought my gosh like everyone's doing this gym thing. And in fact in Germany where the founders are from people 52% of people that do sports listed fitness as their number one sport. But obviously fitness isn't a sport. It is just keeping fit. So they they walked into their gym and they had this kind of epiphany moment. Everyone's working out, doing some weight stuff, doing some cardio stuff, doing some flexibility stuff, whatever it doing some core stuff, whatever it might be. But there's no competitive element. It's a little bit like, this is what they say, this is their words, it's a little bit like going to the golf driving range and hitting a,000 balls, but never actually playing a round of golf. So, how do we turn the gym into a uniform competitive series of activities? And this was this was how Hyrox was born. So, it is the Hyrox the company organize big Hyrox events in massive uh arenas, warehouses, convention centers, whatever it might be. And the the contestant, the the participant who pays upwards of 150 quid for the pleasure takes part either on their own or in a pair and they do eight different exercises. And I'll give you a list of some of them. Ski urg 1,000 m sled push 50 m sled pull 50 m burpee broad jumps which I've seen people do in the gym and they look awful. uh 1,000 meters of rowing, 200 m of farmers carry, 100 meters of sandbag lunges, lunges, which is awful, also absolutely awful, and something called war balls, which I've never heard of. And anyway, interspersed with each of these activities is a 1k run, right? So, you're going around the edge of these convention centers doing an exercise, going around the edge, doing an exercise, and you log your time. and a little bit like a marathon because it's all standardized. You can compete with your previous time with other people and it has become such a thing maybe such a fad that there are calls to make this an Olympic sport. I'm not sure what you think about that. So what you're saying there's no right product. This is just a community. So there are a community of people that you want to monetize and the private equity firm what sees growth in that through some sort of subscription model or fee model or sponsorship model. Is that is that what I'm taking from this? >> Yeah. So, so El Catatan, the private equity investor, if you remember LC Katan, they're owned by the Arno family and LVMH, the luxury goods company, luxury products company, and they invested in Birkenstock. Remember covering Birkenstock a few years ago and their 2023 IPO. They like the look of Hy Rocks in part because it's pretty asset light, right? You know, they do not own gyms. They organize these extremely profitable and re and and in demand and revenue generating events that sell out. I think the London and the New York Hyrox events sold out in under 40 minutes, right? They organize over 100 events globally traveling from event to event. A little bit like in my mind a pop-up circus. So they've got their big lries full of all the kit, right? It's a super slick event. Happens over the course of three days. So you get three days worth of people. The average event has got about 7,000 to 8,000 people paying that 150 quid for the pleasure of running around a convention center eight times and lifting a bunch of weights. And all they have to do is pay for the kit and and do the marketing and and make sure that it stays front of mind as a health competitive health trend maybe/fat. So, so what the thinking of this as an event then what's been the growth of I guess looking at this from a just trying to think of it in my head rationally. So how big is an event? How many people attend the London event? And then how many events are there globally? You mentioned London, New York. I'm assuming that there's like Miami and Paris and Berlin and all the rest of it. And what's that growth rate been? How quickly are they bringing on events? So, how many races are there? Yeah. So, in 2025, there were 83 events, uh 630,000 athletes, almost 8,000 participants per venue, or $1.2 2 million of ticket sales per event. That's assuming about $150 a ticket. So far in 2026, they've had well over 100 events. And their revenue, this isn't actually, this is in 2025. Their revenue from athlete ticket sales, $96.2 million. Average cost per ticket $148. But they also generate $8 million of revenue from spectator ticket sales. $17 million of revenues is from photos. Think about that. Photos. Hold on. Hold on. So, their second biggest stream of revenue is from people buying photos of themselves working out. Is that what you're said? Is that what you're telling me? >> Correct. >> Yep. >> Oh my god. Just Yeah. This is just a vanity project gone gone on steroids, literally. >> But look, but from an investor to bring this back to the private equity world. So they staged their first event in 2017 with just 650 competitors. They are slated or forecast to hit roughly 300 million 257 million worth of revenue in 2026 pretty much doubling 2025 and it looks like they generate a eBar margin a operating profit margin of about 20%. So from a private equity perspective, this thing is just like cookie cutter, right? You know, let's just add more events, make it a little bit more streamlined, add more events. Every event generates X gross profit margin, we generate a EBIT dollar margin of 20%, put some debt into it and and happy days. You mentioned before, you asked me the question like, do I see it as an Olympic sport? And I'm guessing somewhere in the rationale is probably this idea of Yeah. Oh, look. Can you imagine if you invest now and this thing did become an Olympic sport and you take this audience and you just to the magnitude of many times over. But from what I've understood, from what you've told me, there's just over around a million athletes and we're talking about Olympic games. Like how many people, I don't know, are doing some of these other sports. I suppose it's very variable depending on what sport it is. It's like why does Britain always win like rowing and shooting and sailing because there's not many people shooting, rowing and sailing. So I guess it gets kind of what like developed world economies would dominate that as an Olympic sport. So the Germans, the Norwegians or whatever it might be. So yeah, maybe I'm wrong. I was going to say a big restriction would be it's a very inaccessible sport given what you've described, >> but the exercises you described make me think, well, I probably could train for that on a farm >> in Nigeria or wherever and become really good at it and then go to Olympic games and smash it. >> What a great story that >> I think Yeah, I don't I don't see it becoming an Olympic sport anytime soon. I think new Olympic sports or new Olympic uh uh disciplines on the roster are there to appeal to a different audience whether it's BMX racing or whatever it might be. Um high rocks doesn't really appeal to a non-Olympic watching part audience. It's just a different form of exercise and fitness that is pretty well covered by other sports. So I don't see it coming becoming an Olympic sport anytime soon. But what I what I did want to cover um and again looking at this from a risk perspective very similar in its growth trajectory to Aura very similar you can imagine the ven diagram of Hyrox participants and Aura ring wearers to be extreme you know extremely high right maybe they should go into partnership with each other but caution retail do you remember crossfit that was my first thing when I heard about Hierrox and someone explained it very loosely to me at the time whenever that was a while ago I my first thoughts were isn't this crossfit like I mean I' I've been educated since yeah no one talks about crossfit anymore >> yeah and I think there's a few reasons behind this I would say there's probably three concerns that I have here and and definitely taking from the CrossFit model uh or the failure of CrossFit so CrossFit for those of you that don't know uh very very similar to Hy Rocks. Had a massive massive growth trajectory. Went for a sing went from a single gym to over 5,000 affiliate gyms by 2012, peaking at roughly 15,000 affiliated gyms across 158 countries by 2018 with 50,000 certified um CrossFit coaches. That is crazy. But then what happened? a series of scandals relating to the founders, relating to insensitive comments and further scandals related to actually an athlete dying during the 2024 CrossFit games led to lots of the gyms no longer going for the license and people kind of almost boycotting CrossFit as a concept. So there's that kind of, you know, it's easy come easy go in the world of hype, right? You can become the next big thing quite quickly if you get on the viral train and enough photos get taken of you sweating and working out, but you can lose it with one really, really bad or a few really, really bad news stories. Suddenly, Hyrox is no longer the thing to do. So that's number one area of concern. Number two, fee hikes under private equity ownership. So, CrossFit got sold to private equity, as we're talking about now, with Hy Rocks, and they bumped up their affiliate membership from $3,000 to $4,500. And as a as a result, $1,467 gyms dropped out. So the private equity playbook which is for you know for better or for worse squeeze every penny may not result in the upside from for for high rocks as it didn't for CrossFit. And then finally number three relating to this pricing point you're charging 150 quid right for this event. 150 quid is a decent amount of money and it's going up every single year. Who [laughter] I could probably spend a couple of hours with you, and maybe this is overdoing it a little bit, trying to come up with my equivalent version and saying it's better, it's got better health outcomes, we've researched all of the cardiovascular improvements, and I'm going to offer it for 50 quid. Um, there is a pricing point here that I think is is less relevant with the Aura example that would make me go, all right, if there's a really cool new fatty Hyrox thing that comes along that is capturing attention and is cheaper, isn't costing me 200 quid plus all the travel and transport, maybe I'll go for that instead. >> You know what you also said there like you you kind of flippant comment saying Aura and uh these guys should team up. I I think you're you're actually right there. I think a really interesting thing would be having an event though whereby in some way incorporating AI and data. So a you wear the hardware to track the physical logical response to you training and then two you can almost have a sub fee where it's like a coach and the AI video tool films you working out and it looks at your body mechanics and then gives you personalized coaching to every one of those individuals if they opted in for an extra premium bolt-on to their fee. You could have little add-on menus >> and you're on fire today. >> And you could have nutrition like Okay, so looking at I'm just on fire today. Come on, >> brainstorm. >> You're in the wrong job. You are totally underutilizing this job. Get you in a product innovation role. [laughter] >> But no, I love it. I think I think it I think it's very very sensible. But I'm going to end >> I'm going to end this podcast with a question. If you if you you know if your wealth manager came up to you and said you've got the opportunity to invest alongside El Catton in the Hyrox biz or you know you're a Robin Hood customer we're going to give you a slice of the IPO. Which one are you going to go for? I would say there's kind of there's kind of two elements to this. If I was thinking answer answering the the question of of what the advisor is asking me, I would say I'd back the data, you know, not not the deadlift, I would go for definitely the uh aura route. I think that's a business and that's a business where I can see as I've alluded to some potential upside capability of that. Um the the and also I have a deep fear of that Hyrox is definitely a I say definitely I have a deep fear that Hierrox is a CrossFit price. Um however I am totally all for you know people being healthy and and their well-being and improving their lifestyle. And so actually from a the difference with aura is kind of like when I wear my garment it gives me information but it doesn't actually make me do anything like psychologically I receive the information and then it's on me to make the decision on if I act on it. What I think Hyrox does quite cleverly is you're committed financially and competitively by benchmarking. It's kind of like when you do like a marathon. It's like, well, I don't want to look bad because a people are sponsoring me and b I'm going to get benchmarked against everyone else. And so, I'm actually going to work for this and I'm sure when someone the conversion rate probably to sign up to training is probably quite high. So, from a health benefit, yeah, I think all for it from an investment perspective, I'm like, yeah, get me into that aura, Mr. Robin Hood. >> Okay, very, very good answer. Let's um should we put a poll out? >> Data [clears throat] or deadlifts? >> I like that. Data or deadlifts? Let's see what Let's see what the uh community has to say. >> Okay. >> Are we way off the point or, you know, let's let's Yeah, let's put it out there. >> All right. Well, cool. Well, Stephen, thank you so much uh for your time as always. And anyone has any other, you know, perspectives, any other cool tech that that's coming out and emerging in these spaces or if you're just literally ready to rock and roll at the next New York Hyros event, for example. Uh, let us know. We'd love to hear from you. >> Yeah, we love we love being proved wrong. [laughter] >> All right, take care. >> Unless it's Pelaton and yeah, I lose a lot of money. But anyway, [laughter] all right, see you next week.