Fitness start-up Dibs Technology has raised US$1m (€920,000, £687,000) in seed funding as the fledgling business bids to expand the reach of its dynamic-pricing technology for fitness classes.

Founded in New York City in June 2015, Dibs aims to help fitness businesses apply dynamic-pricing technology – already commonplace in the air travel, hotel and entertainment industries – to maximise revenue potential for unfilled class spaces. The Dibs algorithm crunches data from the available inventory, historical purchase patterns, and booking velocity to price based on real-time demand, offering discounts to fill undersubscribed classes and premium prices on those which are in high demand.

“Historically, the fitness industry had little need for this pricing strategy and technology because gyms used to generate the bulk of their revenue from memberships,” said Dibs CEO Alicia Thomas, who co-founded the company with Jina Wye.

But Thomas says the service is becoming increasingly relevant as the boutique fitness class sector continues to grow.

“In recent years, consumer preferences shifted away from high-commitment memberships toward a la carte classes, whether they are boxing, spinning, crossfit, yoga or Pilates,” she added.

“Studios set the min and max prices they are willing to offer on classes, and our algorithm does the rest of the works.”

The issue of how to streamline fitness pricing strategies – taking cues from advancements in other sectors – has received increasing focus lately. UK gym chain The Gym Group recently announced it had created its own statistical model to understand the impact of price changes on member acquisition and retention. Meanwhile, footfall tracking technologies such as Density have also been held up as possible tools for boosting attendance by automatically advertising discounted gym rates when business is slow.

To read more about Dibs – from a feature on internet middlemen in the November/December 2015 edition of Health Club Management – click here.