Nexersys – Exercise Meets Gaming
NO DEAL
EPISODE SUMMARY
🕓 Air Date: January 31, 2014
Asking For:
$2,000,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Nexersys is an interactive and intelligent fitness and gaming platform designed to deliver fast, fun, and effective workouts for users of all fitness levels.
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Background Story
Nexersys, headquartered in Austin, Texas, was founded by CEO Terry Jones, a visionary entrepreneur with a passion for fitness and innovation. Jones, a native of Texas, had a background in the fitness industry and a keen interest in technology. His journey to founding Nexersys began with a desire to revolutionize the way people approach fitness, inspired by observing the rigorous training routines of professional boxers and MMA athletes. Jones recognized a gap in the market for an interactive and intelligent fitness solution that combined the benefits of personal training with the excitement of online gaming.
Drawing upon his experience and expertise, he assembled a dedicated team of experts in fitness, technology, and product development to bring his vision to life. The idea for Nexersys was born out of Jones’ belief that traditional workout methods could be enhanced and made more engaging through cutting-edge technology. He envisioned a platform that would not only provide users with an effective workout but also motivate and challenge them in a fun and interactive way.
Through meticulous research and development, Jones and his team created Nexersys, a next-generation exercise system designed to deliver fast, fun, and effective workouts for users of all fitness levels. Their dedication to innovation and commitment to providing a superior fitness experience has positioned Nexersys as a leader in the industry, with a strong presence in both commercial and home markets.
The Product
Nexersys is an innovative fitness and gaming platform that offers users a personalized workout experience unlike any other. Utilizing cutting-edge technology, Nexersys combines the benefits of personal training with the excitement of online gaming to deliver fast, fun, and effective workouts for individuals of all fitness levels.
The system works by allowing users to select their personal profile and choose from various workout options, including circuit training, high-intensity interval rounds, or one-on-one challenges against Nexersys avatars. Users can engage in dynamic exercises that target cardio, strength, and endurance while receiving real-time feedback and analysis of their performance.
One of the key features of Nexersys is its interactive interface, which tracks users’ progress and provides personalized recommendations for improvement. Additionally, Nexersys offers a range of customizable workouts to suit individual fitness goals and preferences.
Nexersys units are available for purchase both commercially and for home use. The commercial unit is priced at $7,000, while the home unit is available for $2,995. Customers can purchase Nexersys directly through electronic channels, including TV infomercials and direct-to-consumer advertising.
With its innovative technology and engaging gameplay, Nexersys offers users a unique and effective way to achieve their fitness goals while having fun. Whether used in gyms or at home, Nexersys provides a dynamic workout experience that motivates and challenges users to reach their full potential.
How It Went
The company’s position before Shark Tank
Nexersys has demonstrated solid performance in terms of revenue generation, with sales exceeding $4.2 million over an 18-month period. However, the company is not yet profitable, with plans to achieve profitability by September of the current year. Despite the promising sales figures, Nexersys faces challenges related to substantial debt, totaling approximately $7.5 million in shareholder debt. The company’s sales distribution is divided, with approximately 70% of sales coming from commercial units and 30% from home units. This suggests a strong presence in both commercial fitness facilities and individual households.
However, Nexersys’ profitability is hindered by its high cost structure, with the commercial unit priced at $7,000 and the home unit at $2,995. Nexersys primarily sells its products through direct-to-consumer advertising channels, including TV infomercials and electronic sales platforms. The company has invested approximately $1 million in TV advertising, which has generated around $1.5 million in sales. Despite the significant debt burden, Nexersys remains confident in its ability to overcome financial challenges and achieve profitability.
In terms of funding, Nexersys relies on shareholder investments to finance its operations and growth initiatives. However, the company’s high level of debt raises concerns among potential investors, as evidenced by the reluctance of the Sharks to make a deal during the pitch on Shark Tank. Nexersys’ current structure includes CEO Terry Jones and a team of experts in fitness, technology, and product development. Despite the financial challenges, Nexersys remains committed to its mission of providing innovative fitness solutions and aims to become a profitable and globally recognized company in the future.
The Negotiations:
During the negotiations on “Shark Tank,” Nexersys CEO Terry Jones sought a $2 million investment in exchange for a 10% stake in the company. Despite showcasing the product’s innovative features and potential, the Sharks expressed concern over Nexersys’ high valuation and substantial debt. Mr. Wonderful, Kevin O’Leary, pointed out the company’s $20 million valuation and questioned its profitability, given its current financial situation.
Other Sharks raised concerns about the high cost of Nexersys units and the company’s significant debt burden. Ultimately, none of the Sharks were willing to make an offer due to the company’s financial challenges. Mark Cuban emphasized the risk posed by Nexersys’ debt, warning that it could result in shareholders losing their equity in the company. Although Jones remained confident in Nexersys’ potential for success, he left the Tank without a deal.
The negotiations underscored the importance of addressing the company’s financial issues to attract potential investors and secure future growth opportunities. Despite the setback, Jones remained determined to overcome these challenges and position Nexersys as a profitable and globally recognized fitness brand.
