Just over six weeks after interactive equipment company Expresso Fitness suddenly put out a “closed” shingle, the company has been reborn under the ownership of Interactive Fitness Holdings – with the same executive team.
Interactive Fitness Holdings (IFH) was incorporated on Nov. 3, 2009, per Delaware corporate registration records, or one week before it announced it had acquired the assets, including the intellectual property, of Expresso Fitness. (Click here to see a Nov. 10, 2009, company news release in SNEWS®.)
“It was formed in the last two months with the vision that there was a big groundswell, a big opportunity for interactive fitness that wasn’t being served,” said Brian Button, IFH CEO who was an Expresso co-founder and its original CEO. In August 2009, or about a month before Expresso (www.expresso.com) was shut down, Button said he and the board had “a disagreement about its infrastructure,” and they parted ways. But, he said, he still believed in the company's product.
“Expresso grew like a weed,” he said, but there were problems: “One was the downturn, which causes venture capitalists to cut portfolio companies. And Expresso had a lot of infrastructure. It was expensive to run.”
Button said a company like Expresso has high costs: According to past company announcements, Expresso ran through at least $50 million in venture capital and equity funding from four sources since it was founded in 2003 and debuted in 2005. (Click here to read a March 24, 2005, SNEWS brief about its debut at the IHRSA show. )
The Silicon Valley-based company was announced to have shut down due to a “financial hiccup,” the company announced on Sept. 24, 2009. At that time, SNEWS was told by Mark Urlage, vice president of sales for Expresso and now for IFH, that “a group” was trying to buy the assets and restart the company. Click here to see a Sept. 28, 2009, SNEWS story, “Expresso Fitness reports 'financial hiccup,' closes doors for now.”
“Our plan is to do some of the same things and some new things,” Button said about IFH plans, while declining to cite specifics in development. “Our goal with this is to leverage the vast majority of what Expresso did, which was mostly right. Expresso wasn’t a failure in the broad scheme of things. It just didn’t get to the profitability stage.”
Now, Button said, Expresso will focus on the commercial side of interactive fitness. On the consumer side, he pointed out that Dance Dance Revolution and Wii Fit have been hits, but the commercial and vertical segments of fitness have been underserviced.
“It’s our goal to be the leader in the commercial space,” he explained. “Yeah, it’ll be more than just Expresso” product.
For now, Button said the company is busy getting product back into the pipeline. Its direction for 2010 will begin to take shape soon, and that could include new product or even cooperative arrangements with others. “I need more time to decide what to do next,” he said.
IFH has only acquired the assets, Button said, with the liabilities staying with the Expresso venture. However, he added that he didn’t want to alienate current Expresso customers and would begin making decisions about how to handle parts, service and warranties. He noted he could make an announcement on those matters as soon as the week of Nov. 16.
Chairman of the new holding company (www.ifholdings.com) is Bill Stensrud, who was the managing director of Expresso investor Enterprise Partners. Stensrud joined the Expresso board after Enterprise’s first infusion of $4.5 million in July 2005. Enterprise still listed Expresso as part of its portfolio on his website (www.epvc.com) as of Nov. 13, 2009.
As a closely held private company, IFH would be internally managed for now without a board, Button said. He also declined to reveal who holds ownership and has made investments.
Meanwhile, IFH has opened offices in Sunnyvale, Calif., about two blocks from where Expresso’s offices were. When Button left Expresso, he said he wasn’t committed to fitness, but this opportunity drew him back.
“This is way exciting,” he said. “This is enormous. I’m delighted to hear others are saying, ‘it’s a fad,’ ‘it’ll pass,’" since that gives Expresso more opportunities.
“The power of games is undeniable.”