Peloton is now a unicorn because of the spinning class craze
Spinning has turned out to be a big business and there’s one brand that’s been gaining traction in the at-home fitness space. Peloton’s $2000 bikes have developed a cult following, mainly because of its live-streamed classes, which are offered as an added subscription and can be displayed on the bike screen.
The price of the machines may seem steep, but investors are betting that this is a billion-dollar company. Wellington Management, Fidelity Investments, Kleiner Perkins and True Ventures led a $325 million Series E financing round, valuing the company at $1.25 billion. Other investors include GGV Capital and Comcast NBCUniversal.
“We are changing the way people engage in fitness,” said Peloton Founder and CEO John Foley, in a statement. “This financing will allow us to expand our product and content offerings, open new showrooms across the country, and continue to innovate the experience we offer our members at every touchpoint.”
Noted Kleiner Perkins investor Mary Meeker was also quoted in the release about why she’s investing in the company. “Peloton is supporting especially broad subscriber engagement and growth. We believe Peloton is the leader in a new business that has significant potential, physical interactive media.”
I’ve taken a couple of Peloton classes at their New York studio and recommend it. The high-energy instructors and the detailed metrics on the Peloton bikes were enough motivation for a productive workout.
Not everyone lives by a great spinning studio, so I can see how the at-home classes can be appealing. Peloton may be suitable for people who have the money and the space for the equipment. Once the upfront cost for the bike is paid for, the class subscription is just $39 per month.
But competition or a new fitness craze could be roadblocks for Peloton. And the high price point for the bikes will probably have to come down eventually, or their growth could slow. They will likely release new bikes, but it’s possible that they could run into the GoPro problem, where people don’t bother to upgrade.
Perhaps this is why the company recently launched its commercial business, and is selling bikes to gyms for $3000 a pop. They say that the higher price is because these machines able to endure more usage, but they’ve probably also found that some fitness studios are willing to shell out cash for upgrades.
This is a different kind of fitness hardware investment for the tech community. Most of the other bets had been on “wearable tech,” such as Fitbit.
Peloton is headquartered in New York and previously raised at least $119 million in financing since it was founded in 2012.
Featured Image: Business Wire