Software company MyFiziq (ASX: MYQ) has lunged into commercialising its proprietary technology via a timely deal with digital fitness solutions company, FitLab.
The deal marks the company’s third strategic partnership in North America and will involve leveraging the brand and marketing rights of two-time former champion and UFC sensation Conor McGregor.
MiFiziq and FitLab have agreed to integrate MyFiziq’s in-house technology into a mobile application operated by its partner, McGregor FAST, a company directly involved in growing the former UFC champion’s public profile and business empire.
The deal closely coincides with Mr McGregor’s upcoming showdown on 6 October with current UFC lightweight champion Khabib Nurmagomedov, a Russian mixed martial arts fighter that remains unbeaten in the sport.
Marketing power of Conor McGregor
Despite being stripped of his UFC crown in April this year, Conor McGregor remains the UFC’s leading icon and the biggest pay-per-view (PPV) draw in mixed martial arts history, for his unique fighting style and assertive character.
His commercial appeal has ensured he has headlined four out of the six highest-selling UFC pay-per-view events.
His headline bout with Nate Diaz in 2016 drew 1.65 million PPV buys, the most ever for an MMA event.
Possibly his most famous bout was in the boxing ring when McGregor fought Floyd Mayweather in 2017 – a fight dubbed “The Money Fight” by boxing aficionados. The match drew 4.3 million PPV buys in North America alone, the second most in sports history.
The commercial potential offered by high-profile sporting events, combined with the growing role of digital influencers such as McGregor, has enticed companies such as MyFiziq into vying for the rights to associate their products in their name and likeness.
According to MyFiziq, it has developed revolutionary technology which it says “augments rather than disrupts” current technologies used by fitness enthusiasts.
The technology is provided via a mobile phone app which uses pictures from a smartphone to create a “representation of you” in the form of a 3D avatar with accurate circumference measurements.
Currently, MyFiziq says its technology can deliver 97%-accurate body measurements with a repeatability rate of 98%.
The company also provides a software development kit (SDK) and a white-label capability for third-party businesses to deploy the app to support their own brand and commercialise parallel industries such as health and fitness, insurance and medical.
McGregor FAST app
“We work with some of the largest names and organisations in fitness and sports globally, and we constantly seek to power their brands with the most cutting-edge technology. The new McGregor FAST mobile app will have a number of differentiators that will make it a world first, and MyFiziq will be an important part of that,” said Mike Melby, executive director of FitLab.
Mr Melby added that “we will be releasing the initial mobile offering to the world before the end of 2018, and we are pumped to integrate MyFiziq as part of the ecosystem that powers the McGregor FAST user experience.”
According to McGregor FAST, Conor McGregor’s proprietary fitness system will utilise the extensive functionality offered by MyFiziq to add a new dimension to the training and nutrition techniques already being promoted by the former champion.
The company also said that Mr McGregor sees the deal as “a natural extension to his business empire” given his mission to distribute his coaching on mixed martial arts training, nutrition and fight preparation to a global audience.
FitLab plans to integrate MyFiziq’s technology into its arsenal and then leverage the supplemental functionality to promote the product to McGregor’s social media base which currently stands at 41.5 million followers across all platforms including Twitter, Facebook, Snapchat and Instagram.
Once live, the app will allow users to track changes in their body using the MyFiziq technology as they follow McGregor’s training plans.
A smartphone’s gyroscope, front camera, camera burst mode, speaker, screen and light sensors are all features that can be used in conjunction with each other to obtain a set of front and side pictures to be used as part of a fitness plan.
Deal by the numbers
To kick-off the relationship, MyFiziq has estimated an initial target of 250,000 users with both parties agreeing to a tiered revenue structure depending on the aggregate amount of subscriptions.
According to the binding term sheet announced today, MyFiziq stands to receive US$1.5 per month per user for up to 999,000 subscriptions, US$1 per user for between 1-2 million subscriptions and US$0.80 per user if the app achieves 3,000,000 or more subscriptions.
“This is another great alignment for our technology with this new application and the McGregor brand. MMA is a massive market, and the UFC has shown its ability to span the globe as leading organisation in the fastest growing sport in the world, with Conor McGregor as the marquee athlete,” said Mr Vlado Bosanac, CEO of MyFiziq.
“When Conor takes to social media to promote himself, he is a force to be reckoned with. In last year’s event against Floyd Mayweather, McGregor had in excess of 400m interactions on his Twitter feed alone.”
“With PRUedge (PrudentialSingapore) going live last week, Mayweather imminent and the new addition McGregorFast before the end of the year we will be demonstrating what is needed to satisfy shareholders. This will follow closely with Fitocracy and further value being driven from the BCT / MYQ insurance joint venture,” added Mr Bosanac.
Yesterday’s news helped MyFiziq shares rally 35%, closing the day at $0.36 per share.