A betting billionaire’s fitness startup and his challenge

Shalom Meckenzie amassed a fortune of US$1.4 billion (R$8.064 billion) after merging his company with DraftKings. Now, he believes Amp can be even bigger.

In October 2020, Meckenzie was playing poker with his employees on a 58.5-meter yacht off the coast of Greece, celebrating the fact that his Isle of Man-based betting software company, SBTech, had merged with DraftKings. The merger allowed the billionaire’s company to go public as a SPAC, in a $975 million deal a few months earlier. As DraftKings’ largest shareholder, Meckenzie became a billionaire in May of that year when the company’s stock price surpassed $25. During one of the poker hands, he made a losing bet that would cost him hundreds of thousands of dollars—and inspire his next venture.

One of his top product executives in Bulgaria weighed 127 kg, but never felt motivated to lose weight. Meckenzie, feeling very successful, made a big bet. “I told him that if by January 1st you weigh less than 100 kg, I’ll take a 91.5-meter yacht out in the Caribbean, and you get to choose everyone who goes on the yacht. You’ll have the craziest, most fun week you’ve ever had,” says Meckenzie, 48, from his home office outside Tel Aviv, Israel.

The employee, Ian Bradley, accepted the bet. The other executives on the yacht realized that if their colleague won, they would be invited on vacation and decided to help him lose weight. Back in Bulgaria, they put an exercise bike in Bradley’s living room, threw out the processed food from his pantry, and hired a chef and a personal trainer. The trainer was informed that he would receive a large bonus if Bradley lost 12.7 kg in the coming months. He lost the weight and won the bet.

“It was one of the best bets I’ve ever lost in my life,” says Meckenzie, who is in excellent shape for any age, even more so for a man about to turn 50. The billionaire put Bradley and ten other people on a private jet to Dubai, where they stayed in a five-star hotel and partied for five days. “I think it ended up costing a lot more than a yacht in the Caribbean,” says Meckenzie, laughing.

Amp Fitness arrived.
This friendly bet became the proof of concept for Meckenzie’s newest company, Amp Fitness, based in New York. He’s not the first to see a big business opportunity in at-home workouts: Amp’s business model is almost identical to that of several fitness companies that have failed or are struggling to stay afloat, such as Tonal, Peloton, and Mirror.

The strategy is to sell expensive equipment to wealthy people, hire a bunch of famous trainers, collect “data,” and hope to profit by expanding into more lucrative complementary markets, such as personalized nutrition, subscriptions, and apparel, before customers get bored and give up. This hasn’t worked for anyone so far, but that doesn’t stop Meckenzie, who, for now, is funding the company almost entirely on his own.

Amp is a minimalist version of a cross-pulley machine found in any gym. Mounted on the wall, it costs US$2,000 (R$11,520), has access to trainers (both AI and human) through the app, and requires a monthly subscription of US$23 (R$132). Since Amp doesn’t have a screen, users access it through their own device. Therefore, the initial cost is about half that of Tonal. The company, which began selling in January, hired a dozen fitness influencers and minor celebrities as trainers, the most famous of whom is Terry Crews, host of America’s Got Talent , who has 14 million followers on Instagram.

None of this is particularly innovative, and it’s hard to see how this idea could work. The market for connected home fitness equipment is highly competitive and saturated. It experienced significant growth during the pandemic, but is now full of much better-funded companies that arrived well before Amp.

Tonal, backed by LeBron James and Serena Williams, raised $250 million (R$ 1.44 billion) with a valuation of $1.6 billion (R$ 9.2 billion) four years ago. Burning cash forced it to raise another $130 million (R$ 748.8 million) in 2023, with a valuation reduced to $600 million (R$ 3.45 billion) — a 63% drop. Hydrow, a Boston-based rowing company promoted by Justin Timberlake, went through at least two rounds of layoffs but claims it is now profitable. Lululemon bought Mirror for $500 million (R$ 2.88 billion) in 2020 but closed the company three years later.

Peloton , the company that makes connected bicycles and treadmills, is the most successful in the sector, with 3 million monthly subscribers and a cancellation rate of just 1.4% per month. But it is still deeply unprofitable. Last year, it had a loss of US$552 million (R$3.18 billion) on revenue of US$2.7 billion (R$15.55 billion).

Although it managed to generate a small profit of US$3.5 million (R$20.16 million) in EBITDA in 2024, this came after more than a decade and billions of dollars in losses, as well as multiple product recalls, a new CEO, and the dismissal of hundreds of employees. Peloton’s shares have also fallen 96% since the peak of the pandemic in January 2021. Peloton’s CEO, Peter Stern, admitted at the last earnings conference that the company has “a big challenge ahead.”

Alex Alimanestianu, former CEO of Town Sports International, owner of the New York Sports Clubs chain, and current investor in the fitness sector, believes the home workout industry is here to stay, but says the market is full of unnecessary equipment. “I wouldn’t say it’s an impossible mission, but from what I’ve seen so far, most people who want home strength equipment get along very well with traditional models,” he says. “I feel like these smart devices are a bit like Sharper Image products —the design is nice, it looks modern, but it’s not really essential.”

Challenging niche
Meckenzie, born in Tel Aviv in 1976, has a big reason to bet big on the fitness industry. When he was 18, his father, a Libyan-born real estate developer, died of a heart attack at age 59. “That completely changed my life,” he says.

After serving three years in the logistics corps of the Israel Defense Forces, in 2001 he founded, with a partner, an online sports betting company, 10Bet. Realizing that his company could not compete with industry giants, 10Bet focused on offering the best odds to customers. However, this tactic only attracted professional bettors, who nearly drove the startup into bankruptcy. Therefore, Meckenzie ended up selling 10Bet to his brother, who still manages the company.

In 2007, he shifted his focus to selling the software his company developed for setting odds, managing accounts, and integrating payments, creating SBTech. The company provided software to betting companies worldwide. Before merging with DraftKings and going public via SPAC in April 2020, SBTech generated approximately US$110 million (R$638 million) annually and had nearly 1,300 employees, with clients such as the Danish Lottery, Churchill Downs, and Golden Nugget.

Now, in her 10,500-square-foot apartment on Billionaires’ Row in Manhattan, Meckenzie is making her new bet — this time, on the fitness world.

Simeon Siegel, an analyst at BMO Capital Markets who covers Peloton, says the fitness industry is a “very difficult sector,” full of fads and volatile consumers. It’s expensive to design and build a product, scale production, attract customers, and then retain them. “Peloton believed it could grow indefinitely,” says Siegel, who believes the company is trying to recover. “They believed that if they built it, people would come. But the reality is that the target audience of someone who watches Netflix is ​​very different from the audience of someone who gets on a bike or a treadmill.”

All this skepticism only motivates Meckenzie. “When I started SBTech, a lot of people came up to me and said, ‘Shalom, you’re stupid, you’re using all the money you have and [money] you don’t have. This is going to get you and your family into trouble,’” he says. “When people offend me, they propel me forward.”

The billionaire founded Amp in 2020. He recently installed his first batch of 10,000 units, according to Forbes estimates, for customers in California, Florida, New York, and New Jersey, generating an estimated revenue of US$20 million (R$116 million). The company’s goal is to sell 20,000 devices within the year and more than double that number by the end of 2026. Meckenzie states that he is growing slowly to avoid product recalls, as happened with Peloton, and to ensure that his first customers are satisfied and receive proper support. “Demand is very high, and my intuition tells me we’re building something very big here—I wouldn’t be surprised if it were much bigger than DraftKings,” says the billionaire, without irony.

He personally invested about US$50 million (R$290 million) in Amp. Family and friends contributed millions more. Meckenzie knows that this is a negligible amount to scale a hardware company—although he rejects the idea that Amp is a hardware company. He believes Amp is focused on data and well-being. Furthermore, he says he is considering a Series A funding round. Finding willing venture capital investors can be a challenge: total funding for the sector, which reached over US$6 billion (R$34.8 billion) in 2021, fell to less than US$2 billion (R$11.6 billion) in 2023, according to Crunchbase.