Hot fitness equipment start-up to expand retail footprint
Peloton, a four-year-old startup that sells exercise bikes tied to a live-streamed workout experience, is revving up for expansion armed with fresh capital.
The company announced it has recently closed a $325 million series E financing round, which brings its total valuation to $1.25 billion. The round was led by Wellington Management, Fidelity Investments, Kleiner Perkins, and True Ventures. Other significant investors in this round included Comcast NBCUniversal, GGV Capital, Balyasny, and QuestMark.
Founded in 2012, Peloton sells a high-tech and high-cost ($1,995) exercise bike that allows home users to have, essentially, the same type of experience that they would have at a spinning class. It does so by selling a subscription service that gives the user access to live and on-demand fitness group classes (along with archived ones) led by elite cycling instructors. It also provides performance tracking metrics and a real-time leaderboard designed to motivate users.
The company sells its product through its website and its network of showrooms. It currently has 22 retail stores around the nation, including locations at such premium malls as The Mall at Short Hills, Short Hills, New Jersey; The Westchester, White Plains, New York; and The Galleria, Houston. It is set to open a store at Bellevue Square Mall, Seattle, at the beginning of June. The brand hopes to have 40 stores by year-end, according to Business Insider.
“We are changing the way people engage in fitness," said Peloton founder and CEO John Foley. "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 touch-point."
In addition to its bike, Peloton sells a limited number of accessories, from cycling shoes to weights. It recently introduced a commercial-grade bike designed for high-traffic environments and equipped with software designed to quickly onboard new users. And in April, the company announced a partnership with Westin Hotels and Resorts. Peloton's commercial bike is already in over 30 Westin properties around the country.
“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,” said Mary Meeker, partner at Kleiner Perkins.