Peloton, known for reinventing the stationary bike, introduced an internet-connected treadmill offering on-demand built-in live workouts, at CES on Tuesday. Designed to mimic the boutique fitness studio class experience, the $3,995 Peloton Tread offers workouts for athletes of all levels; accounting for their varying tastes in music. The hardware includes an HD touchscreen 3x larger (32 inches) than the one on the Peloton bike, ensuring the user maintains a clear view of the screen when he/she steps off the machine to do floor exercises; along with a 20-watt sound bar and 59 individual shock absorbing-slats (as opposed to a single belt), reducing the impact on the user’s feet. The company also announced it would be introducing additional equipment, like weights, though no pricing info was disclosed.
Howie Long-Short: In 2016, the company tripled its annual revenue to $170 million. The treadmill market is 5x larger than that of the stationary bike, so the new product should help keep revenues rising. The digital health start-up with 8,000 classes, 600,000 subscribers (at $39/mo.) and 29 retail locations, closed on $325 million Series E financing round in May 2017 (among the largest digital health deals of the year) with a valuation +/- $1.25 billion. The company has raised nearly a half billion dollars to date ($444 million), but nearly all that money is privately held. There is one way to play Peloton though, NBCUniversal (CMCSA) was one of 8 investors to have participated in the most recent investment round.
Fan Marino: CEO John Foley is quick to note that Peloton isn’t competing with legacy equipment providers NordicTrack or ProForm, “hardware companies” of “yesteryear”; seeing his unicorn but at the nexus of “fitness, technology and media”. In his opinion, it’s not Peloton’s hardware that has created its rabid following, but the “content, software, community motivation, and programming” that makes their products “super engaging and super fun.” I’m not sure high-intensity cardio workouts are fun, but at least they’ll be affordable to the masses; Peloton introduced a financing plan reducing the monthly price of the treadmill to roughly 2 gym memberships.
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