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Connected Fitness

New products and new technologies are bringing high-end gym workouts to the home.

Overview

Connected fitness products enhance the home exercise experience

Connected fitness refers to apps, equipment, and other digital tools that monitor a user's heart rate and activity to provide personalized fitness programs and real-time guidance.

Next-generation fitness equipment goes beyond exercise videos, stationary bikes, and treadmills. These tools simulate the experience of working out in person at boutique gyms with a personal trainer, or in group classes. Connected fitness products tap into the equipment’s built-in versatility, on-demand workout libraries, live streaming, personalization, and online communities. Due to the Covid-19 pandemic, social distancing practices have made exercising at home with connected equipment the preferred option—if not the only option—as  gyms are restricted or subject to reduced capacity. Furthermore, closer to three-fifths of Americans do not plan to renew their gym memberships even post-pandemic.

What's driving this industry?
Market Sizing

The US connected fitness products market estimated at between USD 6.6–23.0 billion by 2025

Conservative case

USD 6.6 Bn

20% penetration
Base Case

USD 14.8 Bn

45% penetration
Expansion case

USD 23.0 Bn

70% penetration
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COVID-19 IMPACT

Disruptors experienced a surge in equipment sales:

  • Peloton reported a three-fold increase in sales and a 136.9% year-over-year (YoY) growth in connected fitness subscribers, reaching 1.3 million as of September 2020. Average workouts per connected fitness subscriber also increased to 20.7 times per month, up from 11.7 a year earlier.

  • Echelon reported a tenfold growth in sales and a 40% increase in app-class attendance in March 2020 compared to pre Covid-19.

  • Tonal announced sales had tripled since the nation-wide Covid-19 related lockdown.

  • Hydrow announced a fivefold increase in growth in monthly orders during the Covid-19 related lockdown.

Detrimental effects from Covid-19 restrictions:

  • Mirror , FightCamp and Peloton had to suspend or limit home deliveries and equipment in March 2020.

  • In November 2020, Peloton announced supply constraints resulting in delayed deliveries for the foreseeable future despite an increase in factory capacity.

  • Tonal, FightCamp, Mirror and Peloton temporarily halted production and broadcast of live classes during the March-April 2020 period.

Market Mapping

Most startups seem to understand the importance of having a variety of exercise equipment addressing different user needs. Peloton, which initially launched an exercise bike, later launched a treadmill. Similarly, other disruptors such as Volava and Echelon and incumbents such as NordicTrack and Life Fitness have expanded their product range from their initial launches. Some startups in the industry have focused on producing smart mirrors that are powered by machine learning and motion tracking which are versatile in supporting multiple workout routines. These new products are yet to be developed by the incumbents in the industry.

Incumbents
Growth
Early
Seed
Pre-Seed
Bike
?
Treadmill
?
Rower
?
Smart Mirror
?
Other
?
(MYXfitness)
(MYXfitness)
(MYXfitness)
(MYXfitness)
(MYXfitness)
iFIT Health & Fitness
Life Fitness
Technogym
Nautilus
Zwift
Beachbody (MYXfitness)
Retro Fitness
Equinox (SoulCycle)
Dyaco (Sole Fitness)
LifeCORE Fitness
Peloton
Echelon Fitness
Interactive Fitness
VOLAVA
Playpulse
iFIT Health & Fitness
Life Fitness
Technogym
Nautilus
Dyaco (Sole Fitness)
Peloton
Echelon Fitness
VOLAVA
Treadly
iFIT Health & Fitness
Life Fitness
Dyaco (Sole Fitness)
Hydrow
Echelon Fitness
Ergatta
CityRow
Aviron Interactive
iFIT Health & Fitness
Lululemon (Mirror)
Animoca Brands (OliveX)
Peloton
Tonal
Tempo
Echelon Fitness
Fiture
FORME Life
Carbon Trainer
VAHA
Fittar
Studio
iFIT Health & Fitness
Nautilus
Dyaco (Sole Fitness)
FightCamp
Vitruvian Investment
Liteboxer
CLMBR
VOLAVA
BRRRN
MAXPRO Fitness
MoonRun
DribbleUp
Fitness Interactive
JAXJOX
Katalyst
OxeFit
Arena Innovation
Frame Fitness
Quell
Boxx
Omolle
ONYX Interactive

The Disruptors

Peloton leads the new at-home exercise trend with Tonal featured as the next-highest funded disruptor. Both startups have capitalized on building mega libraries of on-demand workout videos, as well as on offering some form of live-streaming of classes. The leaderboard feature is available in most of the programs to motivate users to compete and stay invested in the equipment. Peloton led the industry in funding, having raised USD 1.9 billion, well ahead of Tonal—which is second highest with USD 450 million raised as of August 2021. The disruptor with the third highest level of funding is Fiture, a Chinese startup that has announced tentative plans to enter the US market.

Most of the disruptors identified have commercialized products and are now in either early or growth stages. Several prominent players such as Peloton, Echelon Fitness, and Volava cater to multiple product segments identified within the industry.

Bike

?

Disruptors

?
Funding in USD Millions
Peloton
Public - Market cap USD 11.7 bn
Echelon Fitness
65
Interactive Fitness
42
VOLAVA
5
Watchlist
?
Playpulse

Treadmill

?

Disruptors

?
Funding in USD Millions
Peloton
Public - Market cap USD 11.7 bn
Echelon Fitness
65
VOLAVA
5
Watchlist
?
Treadly

Rower

?

Disruptors

?
Funding in USD Millions
Hydrow
66
Echelon Fitness
65
Ergatta
35
CityRow
13
Watchlist
?
Aviron Interactive

Smart Mirror

?

Disruptors

?
Funding in USD Millions
Peloton
Public - Market cap USD 11.7 bn
Tonal
450
Fiture
392
Tempo
299
Echelon Fitness
65
Watchlist
?
FORME Life
Carbon Trainer
Studio
VAHA
Fittar

Other

?

Disruptors

?
Funding in USD Millions
FightCamp
99
Liteboxer
26
CLMBR
18
JAXJOX
17
Katalyst
15
OxeFit
13
VOLAVA
5
Watchlist
?
Vitruvian Investment
Arena Innovation
Frame Fitness
Quell
BRRRN
MAXPRO Fitness
Boxx
Omolle
ONYX Interactive
MoonRun
DribbleUp
Fitness Interactive

Peloton

Peloton offers connected bikes and treadmills. The company went public in September 2019, raising USD 1.2 billion at its IPO at a valuation of around USD 8 billion. Peloton offers two models of bikes; “Peloton Bike” (priced at USD 1,745) and “Bike+” (USD 2,495). Bike+ is equipped with a larger touchscreen and a high-fidelity sound system. Peloton’s running treadmill offerings include “Tread+” (USD 4,295) and a more compact version called “Tread” (launched in early 2021 at USD 2,845). It also offers a connected strength training product named “Peloton Guide” (USD 495), a camera with machine learning capabilities that can be connected to a home TV for a connected fitness experience. Peloton ventured overseas, launching its products in the UK and Canada in 2018, Germany in 2019, and Australia (only the bike models) in July 2021. As of December 2020, Peloton operated close to 100 retail stores in the US and around 40 more globally.

Peloton’s all-access membership for its fitness products (USD 39 per month) includes instructor-led live and on-demand classes, scheduled workouts, scenic rides and runs, access to leaderboards, real-time performance tracking, and game-based workouts (available for bikes, with the beta launch planned for late 2021). Users can also access on demand off-equipment workouts including yoga, Pilates, barre, meditation, and boxing. It also offers an app-only membership with limited features for USD 12.99 a month, or less for some subscribers, including students and healthcare workers. As of September 2021, Peloton had 6.2 million total subscribers, including digital-only customers, and a total of 2.5 million connected fitness subscribers. Peloton also offers a corporate wellness program dubbed “Peloton Corporate Wellness” to include corporate users, in addition to home users, and its subscribers include UnitedHealth, Samsung, SAP, Wayfair and Accenture Interactive. Peloton’s FY2021 (FY ending in June) revenue doubled year-over-year (YoY) to USD 4.0 billion, with the fitness equipment sales accounting for 78% of revenue while subscriptions accounted for the remainder. Revenue growth was driven by the strong demand for its fitness equipment amid the Covid-19 pandemic. The company reported an adjusted EBITDA margin of 6.3% for the year.

In December 2020, Peloton acquired the fitness equipment company Precor (deal finalized in April 2021) to gain US manufacturing capabilities and improve research and development (R&D), aiming to release a broader portfolio of products. In March 2021, the company also confirmed the acquisitions of Otari (reportedly acquired in late 2020), a developer of interactive workout mats with screens; Atlas Wearables (acquired in November 2020), a developer of fitness-oriented smartwatches; Aiqudo (acquired in February 2021), a developer of artificial intelligence (AI)-powered digital voice assistant systems; and intellectual property from Peerfit, a digital health company (in November 2020). In line with the acquisitions, in June 2021, it was reported that the company is working on releasing a heart rate monitoring armband to track the intensity of workouts. The device is said to be available in two sizes and would connect to Peloton’s bikes, treadmills, and its fitness apps. In May 2021, Peloton announced plans to build the first of its own manufacturing facilities in the US, in Troy Township, Ohio, investing USD 400 million. The facility’s construction is set to commence in mid-2021, with commercial operations expected to begin by 2023. As of May 2021, the company has been manufacturing fitness equipment in third-party facilities in Asia. Peloton intends to commence production in the US by the end of 2021 through manufacturing factories owned by its subsidiary, Precor, located in North Carolina and Washington.

The company has faced several lawsuits and safety issues in recent years. In February 2020, Peloton settled a lawsuit filed for using copyright-protected music. Upon settling, Peloton partnered with music publishers and artists to add tracks to its music library. In May 2021, it recalled its treadmills and halted treadmill sales in the US following safety concerns highlighted by US authorities, which also resulted in lawsuits filed on behalf of its investors. However, Peloton announced fixes and re-launched the Tread treadmill in late 2021.

Segment:
Bike
Total funding:
USD 1.9 billion
Competitors:
Volava, Echelon
Disruptor Funding History

Bike:

Peloton
Echelon Fitness
Interactive Fitness
VOLAVA
Playpulse

Treadmill:

Peloton
Echelon Fitness
VOLAVA

Rower:

The Incumbents

Traditional players re-innovate to compete

The at-home workout space has not seen partnerships between traditional players and new entrants so far. One reason could be the expertise traditional players have and the relatively low technology barriers against matching similar innovations. This has led to most traditional players choosing to develop their own products in-house.

Acquisition

In-house Development

Partnership/JV

company-logo-0iFIT Health & Fitness
check
company-logo-1Life Fitness
check
company-logo-2Technogym
check
company-logo-3Nautilus
check
check
company-logo-4Lululemon (Mirror)
check
company-logo-5Zwift
check
company-logo-6Beachbody (MYXfitness)
check
company-logo-7Animoca Brands (OliveX)
check
company-logo-8Retro Fitness
check
company-logo-9Equinox (SoulCycle)
check
company-logo-10Dyaco (Sole Fitness)
check
company-logo-11LifeCORE Fitness
check
iFIT Health & Fitness

iFIT Health & Fitness (iFIT) (formerly ICON Health and Fitness), founded in 1977, is the parent of the well-known home and commercial fitness equipment brands NordicTrack, Freemotion, ProForm, and the software platform iFit. Every piece of equipment has a built-in screen that plays on-demand workout videos and trainer-led studio classes from the iFit platform (available for a monthly subscription of USD 39). iFit also offers other workouts that do not require equipment, such as bodyweight exercises and yoga sessions. Its latest iFit ActivePulse, introduced in January 2021, includes a patent-pending heart rate armband with personalized and automatic heart rate training available on all iFit-powered equipment. The company has more than 6.4 million total iFit members and 1.5 million connected fitness subscribers in more than 120 countries as of September 2021.

NordicTrack, which manufactures commercial and at-home exercise equipment, has developed its brand of connected fitness equipment that includes treadmills, bikes, ellipticals, strength trainers, rowers, and mirrors. Its key product, treadmill, includes integrated, interactive features allowing trainers to adjust the treadmill’s speed, incline/decline, etc. The price progresses from USD 2,299 to USD 3,799 based on screen sizes; the price includes a year-long iFit membership. Furthermore, NordicTrack introduced its connected fitness mirror, “Vault,” in January 2021, featuring a rotating mirror and a touchscreen powered by iFit. It also opens up to a carbon steel locker to hold other fitness equipment. Vault with the equipment is available for USD 2,999, while the standalone version without the additional equipment is sold for USD 1,999; the price includes a year-long iFit membership. Vault competes directly with fitness mirror producers such as Tempo, Mirror, Forme Life, and Tonal and is priced at a slight premium compared to rivals. Its unique features (ex: the variety of equipment and one-year free membership) might justify the higher prices.

ProForm’s portfolio of connected fitness devices includes iFit powered, treadmills, bikes, and smart mirrors. The latest products introduced to the market include a treadmill, bike, and smart mirror (all launched in February 2021). The Freemotion brand also offers treadmills, bikes, and other strength training equipment, all powered by iFit.

In July 2021, iFIT acquired two companies; 1) Sweat, an Australian digital fitness app for women’s health and fitness, to operate as a standalone brand to complement iFIT’s operations and help grow its membership base. The companies will work together on fitness content development for an increased range of workouts; and 2) 29029 Everesting, a premium ultra-endurance event and community, to expand its offerings to include outdoor fitness events to its subscribers. iFIT will also provide its connected fitness equipment and workout trainers to 29029 event participants.

The company’s last funding round was in October 2020 for a USD 200 million growth investment led by the private equity firm L Catterton to expand its iFit-powered connected fitness product category. Almost a year later (August 2021), iFIT filed for an initial public offering (IPO) to be listed on Nasdaq, to raise USD 646.15 million, targeting a valuation of USD 6.61 billion. However, the planned IPO was postponed in October 2021, citing the volatility of the capital market.

Notable Investors

No investor data is available

Funding data are powered by Crunchbase
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