How fitness studio software Hapana became a behind-the-scenes tech trainer to booming brands

Originally founded as a software solution for personal trainers, Hapana pivoted to bricks-and-mortar fitness studios in 2017 and took on a more global outlook, but its hard-earned victories in the US were unravelled by COVID-19 and the ensuing gym closures.

This could have been a death knell for the Sydney-based tech startup if not for the eagerness of burgeoning Australian fitness brands to embrace innovation.

Hapana answered their call, playing a major role behind the scenes to enable fitness businesses to provide live-streamed and on-demand video offerings to their members, while spotting some of the heavy lifting taking place as studios used pandemic downtime to refine their systems.

In a post-lockdown society the company has gone from strength to strength. Founder and CEO Jarron Aizen tells Business News Australia the business has grown rapidly since raising $17 million last year, and now has its sights set on an AI-first re-platforming to add further value to the fitness sector.

Jarron Aizen founded Hapana while at university as one of many 'mini-ventures', attracted to the industry by his own passion for fitness, sports and wellness, and identifying opportunities for a new challenger brand in a fairly monopolistic management tool app marketplace in the industry. 

Early customers were personal trainers working as independent contractors within Australian gyms, but Aizen eventually found the technology had more significant applications for gyms themselves.

Thus a newfound identity was formed for Hapana, starting with boutique gyms and then growing to multi-unit organisations, whether it be franchises or corporates. Hapana secured three "anchor tenants" in Australia - KX Pilates, Body Fit Training (BFT) and UFC Gyms - which it has grown with ever since.

"They helped us build the technology to then scale beyond your three concentrated anchors to diversify revenue streams, and obviously attract a number of other large growing brands beyond them," says Aizen.

These brands were nowhere near as large then as they are today. In that time KX Pilates has grown from 60 locations to more than 120 worldwide, and BFT has gone from being in its infancy with just five outlets to now more than 300-plus around the world.

Having these anchor tenants gave Aizen the confidence to think bigger, prompting him to move to New York in mid-2018 with an aim to grow Hapana in a much larger market.

"I landed the Gold's Gym headquarters in the US, out of Dallas, in 2019, which was phenomenal to kick-start our growth in the States," Aizen explains.

"I was on that side of town during the time pandemic hit in New York. Needless to say, we're in a service space, a people business, and all of our gyms that we were operating with were shutting over that period.

"After all the work I had done to secure Gold's Gym, unfortunately, they went into chapter 11 and that contract didn't see the other side. So we basically had lost ground that we had spent to land these anchors in the US."

How the core Australian business kept Hapana afloat

He notes the situation was different in Australia however, where the "strength of the franchise networks led to the survival of like the KX, BFT and UFC Gyms", in addition to its client base of smaller boutiques.

"Interestingly, those were the years that they thrived. They had money behind them to capitalise on it, whereas a lot of the independent gyms unfortunately closed over that period," Aizen says.

"We had the US dip over that time. It didn't rebound until late 2021-22. Australian business boomed and helped fund getting infrastructure back into the US."

Just as its clients were willing to change the way they developed, so too did Hapana as Aizen listened to their needs.

"What I saw in the market was software that could help with billing and scheduling and the member app interactions, but what I found beyond the hood was a market of add-ons," he says.

"You needed an add-on for selecting a spot, you needed an add-on for reporting. I'm not talking about an add-on from our existing company; you had to buy third-party systems just to complete your ecosystem.

"So our big mission was to consolidate the operating system baseline requirements, and during the pandemic one of those requirements was live streaming, on-demand videos - all that powers the at-home experience."

In response, in March 2020 Hapana built all of the at-home experience components for its software, launching within six weeks.

"It was real startup mode - roll up your sleeves and get it out to the market," he says.

"Over that time Melbourne was opening and closing doors every week, except those businesses didn't have to tell their members to download another app...we enabled our businesses to be more fluid during that uncertain period.

"When businesses shut their doors we couldn't charge them either, and there were periods of more extreme cash burn. But because we were also pivoting to online and in-person, it helped us get through the period and basically wait for investors."

He clarifies that thanks to its success Hapana was able to garner the support of high net worth (HNW) individuals with smaller tranches of money. Interestingly, it was pre-pandemic that Aizen had approached David Shein of OIF Ventures, which eventually led its 2024 raise.

"They had just launched their early-stage funds, and I sat down with him and told him we had just acquired UFC Gyms. He laid it out, telling us it was great to see we had our first anchor, and what we needed to do to make sure it was repeatable," Aizen says.

"Even if there was a missed opportunity to get in earlier and have a bigger percent of the pie as an early-stage investor, he came back in and saw the value. Over six or seven years, because that's how long those conversations took, we actually went and executed accordingly, not just with the advice that was given over that time but with a lot of persistence through the pandemic to get out onto the other side."

Aizen says the "real institutional capital opportunities" didn't really open up till late 2022, as until then most of the hype in the space was around Peloton and the connected fitness space rather than bricks-and-mortar studios.

Capital raise spurs rapid growth, easier recruitment

The entrepreneur says that since the $17 million raise last year, led by OIF Ventures and Bailador Technologies (ASX: BTI), the team has grown to around 120. The speed of growth was reflected in a June update from Bailador, which increased the carrying value of its investment in Hapana by 50 per cent to $11.6 million.

"We've brought in a few more critical layers of leadership, but also established a HQ office out of Sydney in Australia more aggressively as a global R&D, which historically was done in the US, India and Brazil," Aizen says.

"Australia is now the largest human resource centre – we were only 10 in Australia at the time, and now we’re up to 45-50 people out of Sydney, predominantly.

"From the time that the investors started diligence which was around March-April 2024 to now, we’ve actually doubled the size of the business."

He says some of that growth in recent months can be attributed to the investment, but "a lot of it was already in motion".

"The whole company has scaled immensely - we've acquired a number of great brands over the time," the founder notes.

"Last year we acquired Fitstop, which is another great Australian brand – 156 locations operating in four countries. We migrated them with 10 years of data in just a week literally, and just before Christmas."

He says announcements are imminent for two major client deals in the United States and New Zealand, while other Australian groups Hapana has been working with include STRONG Pilates and Viva Leisure (ASX: VVA).

"We’re starting to get in with all of the major stakeholder names in the country – we’ve got  quite significant market share of the main brands now," the entrepreneur says.

"Certainly we have also continued to focus on the mid market of two to 10 in size, not just 50 to 100-plus in size, because those brands are growing rapidly.

"There’s one in Australia called Joy In Movement (JIM). They’ve got only three or five locations open, give or take, and they’ve sold 50 or 60 franchise locations already. So you're about to see a boom of a new brand in Australia, and they've come across to us just in the last couple of months."

Another observation post-capital raise is the relative ease the Hapana team has found when it comes to hiring.

"The calibre of the talent that you can get when you’re a scale-up is vastly different to the calibre that you can actually get inbound as a startup," he says.

"You really have to go and search for the talent, do a lot more outbound work in the earliest stages; not to say we’re not doing that now to source talent, but we found a lot of folks who love health, fitness and wellness, who have a passion for it and deep expertise in their field, coming from companies like Google, Deel, Salesforce, Hubspot, groups like that.

"They're coming to Hapana to kind of roll up their sleeves, still in that scale-up mode but bringing the expertise from their larger, corporate, listed company experience."

Aizen highlights there are now 2.5 million check-ins a month at fitness and wellness chains using Hapana's software, which is on track to processing $1 billion in the 2025 calendar year.

"It's an impressive stat, and also just a reflection of how businesses have entrusted us as a mission critical platform to scale their own operations," he says.

AI the next frontier of growth for Hapana

Aizen adds that funds from the raise are also being used for a full re-platform of Hapana's tech stack, making it AI-first.

"We want to be a first mover in the domain with AI generally, not only in how we build it into the platform, but how we use it in the business," he says.

"My hypothesis is that  every company out there is gonna have to rebuild in the next three to five years with the rate of how things are moving. So we're trying to be at the cusp of that curve.

"As we’re in the midst of hiring great talent, we can gear that talent to be stronger suited for the tools available today rather than being in debt with the old way of thinking."

But what about the deeply human aspects of running an in-person fitness studio. What impact would AI software have on that?

Aizen says the main purpose of development currently is to have AI run a lot of the front desk operations or inquiries.

"Eliminating the front desk operations is huge. There are people costs associated with that, and I believe AI can do a much better job than humans in that space," he says.

He is quick to point out this doesn't mean getting rid of front desk staff altogether, but finding AI-led efficiencies will allow fitness businesses to hire member-facing staff who can put more focus on "welcoming people in, knowing their names, talking about their family and the coffee around the corner or whatever it is, and creating a community".

"So rather than being behind the desk to process an administrative task, to actually have them as an engagement officer and an experience rep," he says.

"I think they’re going to be able to repurpose their time and hire a different type of person that focuses on experience and community, rather than administrative workloads."