Zomato-backed Cure.fit sacks 120-150 employees as it limbers up for IPO

Zomato-backed Cure.fit Healthcare, the parent company of fitness centre operator Cult.fit, has laid off 120-150 employees as part of business restructuring and streamlining of operations, with the aim of achieving company-level profitability in FY25.

The move is also driven by the company’s aspiration to get fit for a public listing, with plans to look at an initial public offering (IPO) after achieving profitability and sustaining it for a couple of quarters, sources told CNBC-TV18.

“As part of our regular annual operating planning process, we have reduced some redundant positions with the aim of streamlining operations. This is aimed at improving productivity and setting us up for full profitability in FY25…” said the company statement.

Employees in group businesses — CultFit and D2C arm CultSport — were impacted by the current round of retrenchment, which is the company’s most significant since 2020, when it cut 800 jobs as the pandemic-led lockdown shuttered gyms and fitness centres. By the time FY22 drew to a close, losses topped ₹700 crore.

The company soon pivoted to an asset-light, franchise model for its gyms and fitness centre vertical and saw revenue soar over 3.2 times to ₹694 crore and losses narrow by 20% to ₹551 crore in FY23.

In an interview with CNBC-TV18 in December 2022, the company had said the fitness business had turned operationally profitable and plans were in place to hit group-level EBITDA profitability in FY24 and list on the stock exchange in early 2024.

Now, the company is working with the goal post of achieving “full profitability” in FY25 as it looks to tap public markets.

Set up by Myntra Founder Mukesh Bansal with Ankit Nagori (who left the company to lead the spun-off healthy foods vertical, Eat.Fit), Cure.fit turned unicorn at a valuation of $1.5 billion in a ~$150-million funding round led by Zomato in 2021.

Before the unicorn round, Tata Digital had invested upwards of $70 million in Cure.fit. The Tata Group had also tapped Bansal to head its newest and youngest vertical. However, in early 2023, Bansal stepped down from his role as the president of Tata Digital.

Besides Zomato and Tata Digital, Cure.fit also counts Accel, Temasek, Kalaari Capital and Chiratae Ventures, among others, as its investors, who have together pumped more than $600 million in the health and wellness unicorn.