The experience of COVID has brought wellness top of mind along with maintaining both physical and mental health during these trying times. Hydra Studios, an operator of wellness spaces in the city launched by two Goldman alums, is looking to serve this market through its network of spaces for people to relax, workout, and recharge at convenient locations throughout the city as we began pondering life post-COVID. Pivoting from a communal offering, the company now focuses on the individual experience, offering private suites, outfitted with HEPA air filters, that can be individually reserved for a private workout, relaxation, or even a meditation session. Moden locker rooms with rainfall showers, steam rooms, infrared saunas, and premium products await members. The company’s first studio launched in 2019 within a Convene location in Midtown and now Hydra is ready to launch its flagship space in FiDi in the new year. Flex memberships start at $119 per month and individual sessions start at $24.
AlleyWatch caught up with Cofounders Marie Kloor (CEO) and Dan Nielsen (COO) to learn more about the company’s vision, the experience of building a space in the middle of a pandemic, and the company’s recent funding round.
Who were your investors and how much did you raise?
We raised $3.8M in a seed round from a group of investors that include Company Ventures, Slow Ventures, CityRock Ventures, Courtside Ventures, Fifth Wall, Hatzimemos/Libby, and Outbound Ventures.
Tell us about the product or service that Hydra Studios offers.
Hydra Studios is a network of elevated wellness studios for the modern workforce. We are among the first self-care offerings designed and operated with COVID-19 considerations built into our DNA. Our mission is to become a physical and mental wellness destination, helping members restore what daily life takes out.
Our flagship studio has private suites that can be reserved for fitness — including Peloton, MIRROR, TRX, mats and weights — meditation, or simply a quiet place to recharge. Each suite is cleaned before and after each session and outfitted with HEPA air filters; the space itself has a newly upgraded ventilation system and antimicrobial surfaces, with common area touchpoints eliminated where possible.
We also have well-appointed locker rooms featuring rainfall showers, steam rooms, infrared sauna, vanity stations, and a selection of products from brand partners including Brooklinen, Blind Barber, Malin + Goetz, and Verb. Our experiential retail area offers a selection of predominantly sustainable products from female-founded companies.
What inspired the start of Hydra Studios?
Marie worked at Goldman Sachs for over 5 years and she was constantly using the company gym and locker room as a second home base to get ready after morning workouts, change before an event, or simply take a quick break during long days. After leaving Goldman to work at a smaller startup, she found that it was the amenity she missed most because it allowed her to do more with her day. Hydra Studios was founded with the belief that you shouldn’t have to work at a large corporation like Goldman or Google to have access to spaces that support how the modern workforce is actually working, living, and traveling. We believe wellness is becoming a central part of many people’s lives – especially after the pandemic. Providing spaces that allow professionals on-demand access to wellness will become integral to the future of work and real estate.
How is Hydra Studios different?
We aren’t your traditional corporate gym or fitness studio. We combine personalized physical fitness with mental wellness to create a holistic wellness destination. We have monthly memberships or day passes available in order to be flexible. We also focus all of our programming on the needs of the modern professional – including sessions on nutrition, stress management, and relationship wellness.
We launched our first studio in 2019 exclusively serving Convene at 530 Fifth Avenue. Our members there repeatedly give feedback on the convenience of accessing these luxury wellness amenities at their office as a major differentiator.
What market does Hydra Studios target and how big is it?
We are focused on real estate, which is the biggest asset class in the world, and the workplace wellness industry, which was pegged at $48B (and growing) in 2019.
What’s your business model?
We have two key offerings:
- The first is B2B where we partner directly with landlords or corporates to provide our services exclusively to their building or employees. We are paid a monthly fee to leverage our operational expertise in order to attract and retain talent in a competitive market.
- The second is a B2C offering where we operate flagship locations that are open to the public – we sell monthly memberships for access to private, wellness spaces throughout urban centers
How has COVID-19 impacted the business?
Like many businesses, COVID-19 has affected our operations and forced us to rethink our business model. Just as we were beginning construction on our flagship studio, the pandemic hit. We viewed this as a challenge, but also an opportunity. We redesigned our studio and its operations, pivoting from creating a communal experience to a more private one, with suites reserved individually and cleaned between each use. We also updated our materials to be antimicrobial and eliminated common-area touchpoints. In doing so, we aimed to set a new industry standard for fitness and wellness post-COVID.
What was the funding process like?
Raising money is never easy; especially for first-time founders. We were also pre-revenue while raising, so had to communicate our vision with renderings and a detailed financial model. To be frank, it often takes longer than you plan for and can occupy too much of your time if you aren’t careful. It’s critical to have partners in your corner that you respect, enjoy talking to, and like working with – that makes the process that much faster, easier, and accretive for all parties involved.
What are the biggest challenges that you faced while raising capital?
In order to prove concept and product-market fit, we needed to raise capital for CapEx which is typically a non-starter for VCs and other types of early-stage backers. We focused on investors who understood this upfront cost in our early stages and realized that ultimately it would fade away once we had proven value to landlords. These investors have deep expertise within real estate funding, operations, and have LPs who are familiar with our return profile and growth plans.
What factors about your business led your investors to write the check?
We have a number of tailwinds in our favor:
- Traditional retail woes have been present for a long time given market pressure from DTC brands and commerce giants like Amazon and Walmart. Furthermore, the pandemic has only intensified this pressure ultimately forcing landlords to innovate on experiential retail and invest heavily in future-proofing their assets
- Flexible workspace as a concept is no longer just for startups. Large corporations who are used to offering a premium office experience to their employees will look for flexible space solutions that offer or are partnered with wellness amenities and providers like Hydra Studios.
- Underutilized real estate is also part of our secret sauce. We ultimately don’t need to take coveted, storefront retail or even prominent commercial space within buildings. Given that our services are focused on health and wellness, we are a private experience and can take the “nooks and crannies’ of a building for our footprint. Therefore, we don’t represent an opportunity cost for landlords who are, at the end of the day, leasing out space and trying to maximize dollars per square foot.
Given that our services are focused on health and wellness, we are a private experience and can take the “nooks and crannies’ of a building for our footprint. Therefore, we don’t represent an opportunity cost for landlords who are, at the end of the day, leasing out space and trying to maximize dollars per square foot.
What are the milestones you plan to achieve in the next six months?
We are myopically focused on being a primary driving factor in office reintegration strategies for our landlord partners. Given that vaccines are on the horizon, tenants of all shapes and sizes are figuring out their return-to-work strategies. We are excited to be a part of that process because our services represent a safe and attractive reason to help drive employees back to the workplace.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Now is a time to be patient with your capital. One of the hardest things for us to do when the pandemic hit was put the brakes on upcoming projects, hiring strategies, and other expansion efforts outside of our core thesis. It was very difficult because we’d worked hard to be where we were, but it was the right decision.
We have ample runway to ride this out and wait for the post-COVID world to take better shape. We would highly encourage others to do the same as we are finally seeing some light at the end of the tunnel to this once-in-a-generation pandemic. The decisions will be difficult, and at times, even agonizing, but you owe it to your company, yourself, and to your investors.
Where do you see the company going now over the near term?
We hope to become an integral part of back to office plans by partnering with commercial real estate owners to reposition underutilized spaces as on-demand wellness experiences. We’re also looking to take advantage of attractive opportunities that have become available as a result of the pandemic, including launching spaces in residential real estate and healthcare facilities. Our ultimate goal is to grow a national network of Hydra Studios locations.
What’s your favorite outdoor dining restaurant in NYC?
Rule of Thirds by McCarren Park in Greenpoint. They have a beautiful outdoor dining area, creative drinks, and delicious izakaya.
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