A trend of ‘connected fitness’ has brought screen-based workouts to the mainstream.
It’s a business tale that may soon have a ripple effect for exercisers around the planet. Two plotlines this week crossed as Peloton reeled from a stock-price drop and negative publicity around an ad, while competitor iFit announced massive funding.
Peloton launched as a Kickstarter project in 2013, promising to bring the studio-cycling experience to your home. Live and on-demand classes lured a swell of backers, and the company catapulted into the mass market.
It later unveiled a treadmill and new iterations of its screen-based technology, expanding a physical footprint in retail. The brand caught metaphorical fire in the process to become something of a venture-capital darling with ascending valuation.
Another narrative was unfolding in Utah and the headquarters of ICON Health & Fitness. The company owns iFit and multiple exercise-equipment brands.
For more than 15 years, ICON has worked on its own version of connected fitness, including a library of onscreen classes, personal trainers, and videos made to mimic moving through the real world. A suite of ICON equipment slows, speeds, tilts, and resists to match experiences seen on screen.
This week, a capital management company banked on iFit and its vision of the future of exercise. The interactive fitness platform raised $200 million to help amplify its growth.
News site Axios cited the iFit deal a “BFD” (big f*cking deal) on the day the news broke. A summary noted the transaction “reflects how home fitness companies and their investors keep moving toward the Peloton model, minus the highly questionable ad strategy.”
The Connected-Fitness Industry
In addition to iFit, ICON is a parent company to NordicTrack, ProForm, Freemotion, Gold’s Gym, and more. This makes the company among the biggest players in the space.
What are the plans for the $200 million? ICON gave some hints. In a press release, CEO Scott Watterson said iFit “will dramatically expand consumer awareness, broaden the most expansive library of interactive fitness content in the world, and continue to invest in innovation and technology that truly enhances our customers’ fitness experience.”
ICON competes with fitness manufacturers like Life Fitness and Cybex International. New brands include Echelon, which offers a fitness app, video classes, and bikes that fit iPad tablets. Another startup, Mirror, builds a display into a reflective rectangle mounted on a wall and serves as “your new personal trainer, and so much more.”
As for Peloton, despite the hiccups this month, the company remains a dominant competitor in the connected-fitness space. Last year, the company recorded $915 million in revenue and is commonly cited as a $4 billion valuation company.
Cyclists know Zwift and its popular app. The company “turns indoor training into a game” — one that has attracted a mass of users who used to sit and spin on a bike trainer alone. Now they log in, ride, race on video game-like courses, and see where their avatar ranks on a real-world leaderboard.
When competition in a market is this intense, it’s not just about products and the price of a subscription. Brand recognition and marketing are crucial to a network effect with consumers. ICON’s latest funding, as Watterson noted, will be directed toward consumer awareness as well as product refinement.
The connected-fitness industry is no doubt hot. iFit has a built-in user base, claiming 330,000 paid memberships, and that’s growing rapidly. “We added more than 77,000 new paid iFit subscribers in our last quarter alone,” the company touted.
Watterson said his company is “laser-focused” on bringing iFit “to as many consumers as possible, on as many products as possible, as fast as possible.” The capital raise, he said, “just accelerated our ability to achieve our mission.”