Global fitness giant Under Armour announced this morning that it will be selling MyFitnessPal to investment firm Francisco Partners for $345 million, five and a half years after acquiring it for $475 million. The company also announced that it will be winding down the Endomondo platform which it also acquired at the same time for $85 million.
In a press release announcing the news, Under Armour said the reason for this decision was to simplify and focus its brand, keeping it aimed at its “target consumer – the Focused Performer” in the interest of building “a singular, cohesive UA ecosystem.” The fact that Under Armour is selling MyFitnessPal at a discount (not even including five years of inflation and stated MyFitnessPal user growth) indicates there’s more to this than just maintaining focus.
It’s definitely true that both MyFitnessPal (which claimed 80 million users in 2015 at time of acquisition, and has over 200 million users according to today’s press release) and Endomondo were aimed at more casual and entry-level fitness users, who might be working out for the first time, or looking to improve their daily health, but aren’t likely training for endurance sport competitions. Under Armour’s overall brand image is more associated with professional athletics, and with an enthusiast/semi-pro clientele (or those aspiring to that designation).
What’s more likely going on here is that Under Armour sees diminishing value in this segment over the long term, and there a number of possible reasons about why that might be. One is that Apple has been more aggressive about targeting entry-level fitness users, through both its expanded Apple Watch hardware and Apple Health software offerings, and through its forthcoming Apple Fitness+ service, which launches later this year.
While you’d expect the self-guided fitness segment to be a significant growth opportunity in light of the ongoing pandemic and restrictions on shared workout spots including gyms, Apple’s aggressive moves provide a fairly comprehensive default that users essentially get for free, or for a very low cost subscription, with the hardware they’re buying anyways. And the growth of Peloton, through both its dedicated home workout gear and its subscription platform, is also likely sucking up a lot of oxygen in the beginner to casual/habitual fitness user category.
Under Armour did note that it’s going to continue to own and operate the MapMyFitness platform, which includes MapMyRun and MapMyRide. It acquired that company in 2013, and the Under Armour line of connected footwear integrates with those apps for connected tracking of workouts.