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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
USD billion0510152025202020212022202320242025
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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.

View detail

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 iFIT Health & Fitness 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
?
Interactive
Interactive
Interactive
Interactive
Interactive
iFIT Health & Fitness
Life Fitness
Technogym
Nautilus
Beachbody
Retro Fitness
Equinox
Dyaco
LifeCORE Fitness
Peloton
Zwift
Echelon Fitness
Blue Goji
VOLAVA
Playpulse
iFIT Health & Fitness
Life Fitness
Technogym
Nautilus
Dyaco
Peloton
Echelon Fitness
VOLAVA
Treadly
iFIT Health & Fitness
Life Fitness
Dyaco
Hydrow
Echelon Fitness
Ergatta
Aviron Interactive
CityRow
iFIT Health & Fitness
Lululemon
Animoca Brands
Peloton
Tonal
Tempo
Echelon Fitness
Fiture
FORME Life
OxeFit
JAXJOX
Carbon Trainer
VAHA
Fittar
Studio
iFIT Health & Fitness
Nautilus
Dyaco
FightCamp
Vitruvian Investment
Liteboxer
CLMBR
Arena Innovation
VOLAVA
Flexia
BRRRN
MAXPRO Fitness
Omolle
MoonRun
DribbleUp
Fitness Interactive
Katalyst
Frame Fitness
Quell
Boxx
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 4.6 bn
Zwift
620
Echelon Fitness
65
VOLAVA
5
Blue Goji
Unknown
Watchlist
?
Playpulse

Treadmill

?

Disruptors

?
Funding in USD Millions
Peloton
Public - Market cap USD 4.6 bn
Echelon Fitness
65
VOLAVA
5
Watchlist
?
Treadly

Rower

?

Disruptors

?
Funding in USD Millions
Hydrow
270
Echelon Fitness
65
Ergatta
35
Aviron Interactive
24
CityRow
13

Smart Mirror

?

Disruptors

?
Funding in USD Millions
Peloton
Public - Market cap USD 4.6 bn
Tonal
450
Fiture
392
Tempo
299
Echelon Fitness
65
OxeFit
39
JAXJOX
17
Watchlist
?
FORME Life
Carbon Trainer
Studio
VAHA
Fittar

Other

?

Disruptors

?
Funding in USD Millions
FightCamp
99
Vitruvian Investment
26
Liteboxer
26
CLMBR
18
Katalyst
15
Arena Innovation
9
VOLAVA
5
Flexia
4
Omolle
0
Watchlist
?
Frame Fitness
Quell
BRRRN
MAXPRO Fitness
Boxx
ONYX Interactive
MoonRun
DribbleUp
Fitness Interactive

Peloton

Peloton offers connected bikes, treadmills, and fitness mirrors. 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 1,495 onwards) and “Bike+” (USD 2,495 onwards). 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” (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. In addition to equipment, Peloton offers an armband (USD 90) that can be paired with other Peloton equipment to monitor heart rate (released in February 2022). 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, game-based workouts, and podcasts. 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 March 2022, Peloton had 7.0 million total subscribers, including digital-only customers, and a total of close to 3.0 million connected fitness subscribers. Peloton also offers a corporate wellness program to include corporate 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 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). 

Peloton also had plans to build its own manufacturing facility in Ohio (announced in May 2021), but they were abandoned in February 2022 amidst its restructuring plans and lowered demand. The company manufactures its fitness equipment in third-party facilities in Asia. Peloton intended 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. 

In May 2022, Peloton raised USD 750 million in debt financing led by JPMorgan Chase. The company planned to utilize the financing to support its business plan that aims to improve the company’s financial performance and profitability through cost cuts, placing more emphasis on subscription-based revenue, and better supply chain management.

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

Bike:

Peloton
Zwift
Echelon Fitness
VOLAVA
Playpulse

Treadmill:

Peloton
Echelon Fitness
VOLAVA

Rower:

Hydrow
Echelon Fitness
Ergatta
Aviron Interactive
CityRow

Competitive Analysis


Filter by a segment or companies of your choice
Bike

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.

Bike
Treadmill
Rower
Smart Mirror
Other
In House Development
M&A
Partnership
Investment
iFIT Health & Fitness
Life Fitness
Technogym
Nautilus
Lululemon
Beachbody
Animoca Brands
Retro Fitness
Equinox
Dyaco
LifeCORE Fitness

Notable Investors


No investor data is available

Funding data are powered by Crunchbase
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