INSUBCONTINENT EXCLUSIVE:
This morning, Peloton (NASDAQ: PTON), the tech-enabled stationary bicycle and fitness content streaming company, raised $1.2 billion in its
NASDAQ initial public offering
Despite dropping more than 10% in its first day of trading — ultimately closing down 11% at $25.84 per share — the IPO was a bona fide
Peloton, once denied (over and over again) by VC skeptics, now has hundreds of millions of dollars to take its business into a new era
One in which, the media, hardware, software, logistics and social company attempts to become a generation-defining company akin to
Apple.
Founded in 2012 —six years after Soul Cycle opened its first cycling studio in New York Upper East Side and two years before a Soul
Cycle founder, Ruth Zukerman, jumped ship to launch her own indoor cycling business, Flywheel Sports —a man by the name of John Foley made
the ambitious, some might say foolish, decision to start a company that would sell these exercise bikes direct-to-consumer
That way, you could take a Soul Cycle class, in essence, in the comfort of your own home
Even better, technology would improve the experience.
As my colleague Josh Constine recently described it, these bikes come outfitted with a
22-inch Android screen, transforming an outdated exercising experience and bringing it into 2019: &It makes lazy people like me work out
That the genius of the Peloton bicycle
All you have to do is Velcro on the shoes and you&re trapped
You&ve eliminated choice and you will exercise,& Constine writes.
How Peloton made sweat addictive enough to IPO
Peloton ability to get
people exercise — a feature driven by its talented instructors (some of whom were poached from competitor Flywheel Sports) — ultimately
had venture capital investors funneling $1 billion, roughly, into the business
Today, Peloton operates dozens of showrooms across the United States , counts 1.4 million total community members — defined as any
individual who has a Peloton account — and over 500,000 paying subscribers
Why? Because the company, as stated in its IPO prospectus, &sells happiness.
Peloton is so much more than a Bike — we believe we have the
opportunity to create one of the most innovative global technology platforms of our time,& writes Foley
&It is an opportunity to create one of the most important and influential interactive media companies in the world; a media company that
changes lives, inspires greatness, and unites people.
Peloton flagship product, a tech-enabled stationary bike.
Peloton community coupled
with the high margins on sales of its $2,245 bikes had the company reporting $915 million in total revenue for the year ending June 30,
2019, an increase of 110% from $435 million in fiscal 2018 and $218.6 million in 2017
Its losses, meanwhile, hit $245.7 million in 2019, up significantly from a reported net loss of $47.9 million last year.
What next for
Peloton? The opportunities are endless, given the company firm seat at the intersection of hardware, software, media content and more
A third product may be in the works, expansion to international markets or new instructors
Peloton is going after a massive market ripe for disruption
What certain is that we&ll see a whole lot of cash flowing into fitness tech copycats in the next couple of years.
Peloton, following a
number of lukewarm consumer IPOs (Uber), nearly doubled its valuation to $8.1 billion this morning after pricing its IPO at the top of its
To answer some of our most burning questions, we chatted with Peloton president William Lynch, the former CEO of Barnes - Noble, about the
float.
The following conversation has been edited for length and clarity.
Peloton president and former Barnes - Noble CEO William
Lynch.
Kate Clark: What next for Peloton?William Lynch: We now have over a billion in capital to fuel more growth, especially in the area of
