Peloton (company)

Last updated

Peloton Interactive, Inc.
Type Public
Industry Exercise equipment
FoundedFebruary 2012;9 years ago (2012-02)
FoundersGraham Stanton
Hisao Kushi
John Foley
Tom Cortese
Yony Feng
HeadquartersNew York City
Number of locations
37 (retail)
2 (studios)
Key people
 CEO : John Foley [1]
William J. Lynch Jr. (President)
Products Stationary bicycles and treadmills
ServicesFitness classes and subscriptions
RevenueIncrease2.svg $1.8 billion (2020) [2]
Number of employees
1,800 (2020)
Website onepeloton.com

Peloton is an American exercise equipment and media company that was founded in 2012 and launched with help from a Kickstarter funding campaign in 2013. Based in New York City, Peloton's main products include a stationary bicycle and treadmill that allow monthly subscribers to remotely participate in classes that are streamed from the company's fitness studio. Much of the company's popularity stems from its now-celebrity fitness instructors, such as Robin Arzon, Ally Love, Alex Toussaint, and Jess King. [3]

Contents

History

Peloton was founded by Graham Stanton, Hisao Kushi, John Foley, Tom Cortese, and Yony Feng in 2012. [4] [5] In January 2017, William J. Lynch Jr., former CEO of Barnes & Noble, joined Peloton as company President.

Co-founder and CEO John Foley spent 3 years pitching the company to thousands of potential investors, who rejected the idea. “No investors wanted to look at this thing. They wanted nothing to do with it,” Foley said in an interview. [4]

In May 2018, Peloton announced plans to expand into Canada and the United Kingdom in fall 2018. [6] In June 2018, Peloton acquired Neurotic Media, a music distributor. [7]

In March 2019, Peloton was sued by the National Music Publishers Association for using copyrighted music in their videos without proper synchronization licenses, seeking $150 million in damages. [8] The action resulted in changes to music used in its sessions, as well as removal of certain programs that used the songs that were specifically named in the suit. Users criticized these changes as affecting the quality of its product experience. [9] In September 2019, the suit was amended and increased to $300 million. [10]

In October 2019, Peloton acquired Tonic Fitness Technology, a Taiwanese manufacturing company for $47.4 million. [11] In February 2020, Peloton announced that the competitor Flywheel would cease services at the end of the month, after it had settled with Peloton over a patent lawsuit. Peloton is offering exchanges for Flywheel Home bikes. [12]

Peloton benefited from the lockdown measures during the COVID-19 pandemic. According to a May 2020 estimate, its stock price increased by 36%, online searches for "Peloton" almost tripled since the end of February, and quarterly sales jumped nearly 61% to $420.2 million. [13]

In December 2020, Peloton acquired Precor, a maker of home and commercial-grade workout machines, for $420 million from Amer Sports. [14]

Products

Gen 3 Peloton bike Peloton Bike.jpg
Gen 3 Peloton bike

Bikes

Peloton's first stationary bicycle was released in 2014 at a price of $2,245. In September 2020, Peloton released a new version of the stationary bike, dubbed Bike+. Bike+ features a larger, swiveling screen, auto-follow resistance, more speakers, and Apple GymKit integration. Bike+ costs $2,495 and Peloton reduced the price of the original bike, Bike, to $1,895. [15]

All of Peloton's bikes include a touchscreen on which the user may view classes. [16] The product operates on a custom version of Android and is available on Apple TV, Fire TV, Roku TVs and Roku devices, and Android TV, which is installed onto smart TVs from Sony, Phillips, and Sharp. [17] The Peloton app can also be shared from an iOS device using AirPlay or Miracast from your Peloton Bike or Tread, plug an HDMI cable in from your computer, Chromecast from an iOS and Android device, or depending on the brand of TV, classes can be streamed from your TV browser through the web. Bike shoes with cleats are required for use so that the user can lock into the pedals. [18]

Through the evolution of the bike, three "generations" of monitors, or screens, have been released. In July 2019 Peloton announced they would stop providing updates to the gen 1 monitors. Gen 2 monitors (tablet model RB1V1) and Gen 3 monitors (tablet model RB1VQ) are still being updated. Gen 3 monitor is 21.5 inches in size, and is an HD touch screen. The monitor used on the Bike+ is an HD touch screen that is 23.8 inches.

A version of the bicycle designed for commercial environments was unveiled in January 2017. [19]

Many different types of classes besides cycling are available to users including strength, yoga, cardio, meditation, running, stretching, boot camp, barre and walking classes. [20] Additionally, Peloton users can video chat with friends in on-screen classes. [21]

Classes are recorded daily and streamed live from Peloton's cycling studio in Hudson Yards, Manhattan and London, UK, and are then uploaded to the Peloton library for on-demand access 24/7. [22] The studio was open to the public prior to the start of the COVID-19 pandemic with daily walk-in style classes that do not require payment.

Treadmills

Peloton Tread and Tread+ are the company's treadmill products. Tread+ sells for $4,295, and was unveiled in January 2018 by the company at the annual Consumer Electronics Show in Las Vegas, with initial shipments slated for the fall of 2018. [23] Classes are streamed via a 32″ touchscreen and sound bar mounted at the front of the machine. [24] A lower-end treadmill, Tread, was announced in September 2020 and will retail for $2,495. It is expected to be available in early 2021. [15]

Peloton Digital (app)

Peloton Digital is a monthly subscription service that allows users to stream on iOS [25] and Android [26] devices the company's classes on cycling, running (both treadmill and outdoor), yoga, and meditation. Due to the COVID-19 pandemic, Peloton instructors began streaming classes from their individual homes in April 2020, rather than from the Peloton studios. These classes were noted on the app as "Live from Home."

The app offers the following class options: strength, yoga, cardio, meditation, running, outdoor, cycling, stretching, tread bootcamp, bike. bootcamp, and walking. As of January 2021, the app is free but a membership to access the content costs $12.99 a month. [27]

Funding

Before launching its stationary bicycle and fitness platform, Peloton raised $3.9 million in 2012 for product development. [28]

In April 2014, Peloton raised a $10.5 million series B round of funding. [29] [30] In April 2015, Peloton raised a $30 million series C round of funding. [31] In December 2015, Peloton raised a $75 million series D round of funding. [32] In May 2017, Peloton raised a $325 million series E round of funding, valuing the company at $1.25 billion. [33] In August 2018, Peloton raised a $550 million series F round of funding, valuing the company at $4 billion. [34]

In February 2019, Bloomberg reported Peloton had chosen Goldman Sachs and JPMorgan Chase to lead its initial public offering, valuing the company at more than $8 billion. [35] Peloton Interactive confidentially filed with the Securities and Exchange Commission for a proposed IPO on June 5, 2019. [36] The company had not yet decided on the number or price range of shares it plans to sell. [37] On September 26, 2019, Peloton raised $1.16 billion via its IPO, floating 40 million shares of class A common stock at $29 per share. At the market close, Peloton's share price had dropped to $25.76 reflecting an 11.2 percent drop on its first day of trading. [38]

In November 2020, Peloton announced a 232% surge in sales. They also announced that due to high demand, they continue to experience supply issues. [39]

Marketing

Peloton advertised heavily during the 2018 Winter Olympics, with instructor Robin Arzon joining NBC personalities such as Paul Burmeister and Natalie Morales. [40] [41] [42]

The Gift That Gives Back ad controversy

In November 2019, the company released a new holiday commercial, "The Gift That Gives Back", where a wife receives a Peloton bike for Christmas from her husband, and begins recording a video diary of herself using the bike. A year later, she proclaims that she "didn't realize how much this would change me." In late November, the commercial began to receive criticism from viewers who claimed that its plot implied that the woman's husband was dissatisfied with her physical appearance. [43] Peloton defended the ad, arguing that it was intended to celebrate a "fitness and wellness journey", inspired by how its users were often "meaningfully and positively impacted after purchasing or being gifted a Peloton Bike or Tread, often in ways that surprise them." Criticism over the campaign has had an impact on Peloton's share price. [44] [43]

Ryan Reynolds hired the actress that played the wife, Monica Ruiz, for an ad titled "The Gift That Doesn't Give Back" for Aviation American Gin released in December 2019 which lightly mocked the Peloton ad. [45]

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References

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  2. ↑ Thomas, Lauren (September 10, 2020). "Peloton crushes estimates as sales surge 172%, expects strong demand to continue into 2021". CNBC. Retrieved January 13, 2021.
  3. ↑ Kurutz, Steven (February 1, 2017). "Peloton Instructors Ride for Fitness and Fame". The New York Times. ISSN   0362-4331 . Retrieved June 12, 2020.
  4. 1 2 "Peloton's John Foley: How to turn skeptics into fans". Masters of Scale. August 25, 2020. Retrieved November 6, 2020.
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  9. ↑ Garun, Natt (April 24, 2019). "Peloton owners are pissed about bad music after copyright lawsuit". The Verge . Retrieved April 25, 2019.
  10. ↑ "Music Publishers: Peloton 'Let Down Its Customers By Failing to Pay Creators'". Variety . September 13, 2019. Retrieved September 16, 2019.
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  14. ↑ "Peloton will pay $420 million to acquire fitness equipment maker Precor". Yahoo! Finance. Retrieved December 22, 2020.
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  41. ↑ "Peloton Pedals into the (Winter) Olympics With New Campaign". Advertising Age . February 7, 2018. Retrieved September 16, 2019.
  42. ↑ Gay, Jason. "Queasy Rider! A Pedal Through NBC's Olympic Spin Zone". The Wall Street Journal . Retrieved September 16, 2019.
  43. 1 2 Belam, Martin; Partridge, Joanna (December 4, 2019). "Peloton loses $1.5bn in value over 'dystopian, sexist' exercise bike ad". The Guardian . ISSN   0261-3077 . Retrieved December 4, 2019.
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  45. ↑ Wolfe, Elizabeth; Gast, Phil (December 7, 2019). "The actress behind 'Peloton wife' has finally spoken". CNN . Retrieved December 8, 2019.
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