Revamping one of the world’s most successful fitness apps, Sweat CEO Adam Koch MAICD is developing a fresh business model and steering the company into challenging new markets.
They might be specially designed for women who want to get fit and strong, but that has not stopped Adam Koch MAICD putting himself through the workouts created by Kayla Itsines, head trainer and co-founder of the leading global fitness app aptly named Sweat.
“Kayla’s workouts really challenge you a lot — I’ve done pretty much all of them,” says the Sweat chief executive.
“I love using our programs and I’m fortunate I get to see them from inception, when we build the business case to release a new program, right through to the signing of a trainer, then to production and deployment. So, by the time the program becomes live, you’re really keen to step through the customer-facing component of what you’ve created.”
Koch is not alone among Sweat’s almost 100 staff. There are many regular users of its app and twice a year, all take part in a six-week fitness challenge program. “We track performance and we watch where everyone is going,” he says.
The programs highlight the team culture at Sweat, founded in 2015 by Itsines and her then partner, Tobi Pearce, as the Bikini Body Guide fitness program, before changing its name to Sweat.
In 2021 they sold the business to American fitness equipment giant iFIT in a deal reportedly worth US$150m. But after being hit by revenue and profit declines under iFIT’s ownership, Itsines and Pearce bought the business back at the end of 2023.
Both Itsines and Pearce, as shareholders, are today closely engaged with Sweat’s growth and strategic vision. Their industry expertise and founder insights serve as valuable assets, guiding critical business decisions and supporting management to sustain Sweat’s competitive edge and long-term goals.
Sweat’s governance is led by a board of directors committed to ensuring the business operates within all legal and regulatory frameworks worldwide. The board is comprised of Koch as an executive director, alongside Matt Zauner MAICD and Peter Siebels FAICD. Collectively, the board oversees strategic and operational compliance, and provides direction to maintain Sweat’s alignment with global standards.
Zauner brings expertise in Australian corporate law, governance and tax compliance as a former tax lawyer and senior manager with MinterEllison and KPMG. His experience also spans international markets.
Siebels brings more than 30 years of experience with KPMG, including governance roles within the consultancy. His governance and advisory career has included chair roles with South Australian insurer Royal Automobile Association (RAA), RAA Insurance, Electricity Industry Superannuation Scheme, Hood Sweeney and Robern Menz.
The board and management team work closely together, Koch explains, collaborating to keep Sweat compliant and in sync with its strategic business goals.
“When major business initiatives arise, they’re reviewed at board level to ensure alignment with Sweat’s vision, creating a seamless flow between strategic planning and operational execution,” he says. “Effective governance is essential to Sweat’s long-term success, providing a stable framework that promotes sustainability and strategic focus. For instance, Sweat’s governance structures enable a consistent emphasis on member value and empowering women within the global fitness community, supporting both business growth and the mission to improve women’s health and wellbeing globally.”
Koch brought local and global experience spanning the technology, retail, finance and tourism industries to the firm when he joined as chief operating officer in 2018. Since becoming CEO in 2022, he has focused on building a more sustainable business model for Sweat. This includes expanding into adjacent product categories and investing in new technology, as well as pushing harder into North and South America, and the Middle East.
“For us, sustainability became something that was really important. By that I mean, are we an organisation built in a way that is profitable and generating cash?” he says, noting the new focus started well before the reacquisition of the business from iFIT.
“We also looked ahead five to 10 years. We asked, what would it take to get the business to a point where it is robust enough to absorb an acquisition or a merger in the future? How do you strengthen a business to be sustainable?”
Competitive market
The global fitness app market, valued at US$1.54b in 2023, is projected to grow at 17.7 per cent annually between 2024–30, to be worth nearly US$5b. Given the low barriers to entry, there are many more competitors such as Kic, MyFitnessPal and Apple Fitness+ now vying for a share of the digital fitness category. However, Koch says Sweat has key points of differentiation in the quality of its content, the loyalty of its customer base — 50 million users across 170 countries — and its ability to tailor workout offerings to different regional preferences, such as cardio in the US and cycling in Europe.
He also thinks an increasing amount of content in the industry is of questionable quality and claims many new entrants are making promises that cannot be substantiated. Some new competitors, he says, go for “sugar hits” by sexualising their brand. “There is no doubt you will attract attention by doing that,” he says. “We’ve avoided it and don’t think it’s a sustainable way to position a business. You’ve got to have faith in your audience to see through that over time. The reason we’ve got the community we have — unbelievably loyal, really passionate and committed to our business — is because we don’t go for those sugar hits. We understand the diverse needs of our audience and the fact so many women appreciate the way we position the brand. The feedback we get constantly reminds us of this.”
Under Koch’s leadership, Sweat is reinvesting in infrastructure upgrades and re-platforming its technology code base to enhance operational efficiency and scalability. In a sense, it is being run more like a tech company, given its focus on the mechanics of its app and platform. The upgrade of the systems and platforms will allow the deployment of AI to not only remove the more repetitive, task-focused actions in the business, but also to personalise workout plans.
“The moment you create friction in that journey, that increases the chance of a churn event,” says Koch. “So our content must be easily discoverable in a frictionless way. AI will provide that connection in the future.”
Concern for the customer
Given the Sweat platform is a digital one, storing large amounts of customer data, he says the business has a core focus on navigating cybersecurity processes and safeguarding the personal information of its users. Most importantly, Sweat does not retain payment or financial data details of its customers, reducing the risk profile of the business.
Going forward, while Sweat maintains a seasonal balance between acquiring new customers and retaining existing ones, Koch says the latter is fundamental to revenue and profit. Underpinning retention is the creation of content categories complementary to the core fitness offering.
In early September, Sweat relaunched its food and nutrition library in response to customer feedback that its offerings in the space were substandard or even poor. Further phases of the rollout are planned to provide additional nutritional content. “We’re also working on this notion of mental fitness,” says Koch. “That will become more prevalent in our app within the next 12–18 months. We want women to feel supported, not only physically, but also emotionally, spiritually and mentally.”
Sweat judges its success by two key metrics — its ability to acquire and then retain members. Koch says the membership is currently at record numbers and the focus on retention is translating into profits. After posting losses and declining revenues in 2023, he says the business is “having a great year, achieving our targets and budgets” — without revealing numbers.
However, Koch stresses that the loss posted in the previous financial year was an accounting loss, materially influenced by non-recurring items directly associated with the sale of Sweat to iFIT in 2021.
“We removed those items on reacquisition, so it gave us an opportunity to have a fresh start,” says Koch. “It allowed us to get our hands back on the steering wheel. We are in the process, post- acquisition, of making sure the business is profitable and sustainable.
Female focus
In Sweat’s early years, the platform successfully galvanised its user community and turned them into advocates for the brand. This initial growth was largely organic and unpaid. Now Sweat is spending more on paid advertising to help fund growth, but Koch is wary of relying on it too much. By expanding into new categories such as nutrition and mental health, he believes the firm will grow its organic ability and broaden its appeal to acquire new customers.
He is conscious that Sweat’s programs and workout content is created “by females for females”.
“In any leadership role, you should surround yourself with people who can do the job better than you,” he says. “Our teams understand the demands and requirements of the female fitness community. My job is to facilitate bringing those teams together and then to drive a commercially sustainable business. Good leaders establish direction in a collaborative way. Once you have established that, then get out of the road. Allow people to do what they do best and set them up for success.”
Koch has known Sweat’s co-founders for many years and has a strong working relationship with both. While Itsines remains Sweat’s head trainer, Pearce now acts as a strategist to drive its long-term growth strategy. He and Koch still catch up regularly, even if the former is now no longer hands-on in the business.
Koch says his most important contribution to the founders has been bringing “grey hair and governance” to Sweat.
“When I joined, Tobi had 30 employees who were all reporting to him. That was unsustainable. As a result, he was becoming the roadblock to moving at pace. That is not an empowered business, which can stand up and run in isolation of a founder CEO. My ability was to bring in a framework for him to bring the business to that point.”
In turn, the CEO says he has also helped Itsines “prioritise her amazing ideas on a commercial basis”. Most importantly, Koch believes Sweat’s founder-led culture has been another big differentiator for the company in what is a very crowded marketplace.
“There is an immediate connection of emotion to the brand that may not exist if it had been created by another means,” he says. “What a great starting point. It allows you to legitimately use words like ‘authenticity’.”
In the next five years, Koch hopes Sweat can enter commercial partnerships or even take on external funding.
“It is about the transition towards being a platform that ultimately provides a wider range of benefits to more women around the world,” he says. “That is where we want to be. Given the stability and foundation of our business model, the world is our oyster.”
This article first appeared under the headline ‘Hitting the Sweat Spot’ in the December 2024/January 2025 issue of Company Director magazine.
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