Cult fitness-tech company Peloton is set to launch its stationary bikes in Australia next month, following a COVID-19 boom. But what exactly is Peloton, and where did it come from?
Founded in January 2012 by John Foley, Peloton was initially an app allowing users to access gym-style classes from the comfort of their own homes.
In 2014, it developed its first web-connected stationary bike, bolstering the offering to include spin-type classes with online instructors.
It was this innovation that propelled the startup to cult status, with people becoming ‘obsessed’ with their bikes, and with the likes of Hugh Jackman, Usain Bolt and Richard Branson jumping on board.
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By 2018, Peloton had raised a total of US$980 million ($1.27 billion) in venture capital, including a gargantuan US$550 million Series F round, that was reported to value the business at US$4.15 billion ($5.84 billion).
In 2019, it went public on the Nasdaq, almost immediately doubling that valuation to US$8.1 billion ($10.5 billion).
Today, Peloton has about 5.4 million members, and boasts a market cap of US$33.44 billion ($43.37 billion).
The business saw a surge in sales during the COVID-19 pandemic, as people were forced to exercise within the confines of their homes.
According to Reuters, sales jumped almost 61% during Q1 of 2020, totalling US$420.2 million ($544.9 million). During the same time period, subscribers to the app-only service almost doubled.
The fitness-tech giant now offers two bike options and a treadmill, plus the app offering access to other classes and workouts.
However, the journey hasn’t been entirely smooth cycling.
The treadmill products — which are not launching in Australia — were recently recalled in the US over safety concerns, following more than 70 reports of injuries caused by the product, and the death of one child.
The business is also facing one class-action lawsuit from customers and one from investors, related to the safety issue.
And this is just the latest in a string of legal actions. The business has also settled a dispute with publishers over allegedly using unlicensed songs, and it sued competitor Flywheel, accusing it of copying Peloton tech.
According to the Peloton website, bikes will be available in Australia from July 14. But prospective customers can already sign up for a three-month free trial of the Peloton app, accessing yoga, strength and running workouts with no equipment required.
Retail showrooms are expected to pop up in Melbourne and Sydney.
But joining the club doesn’t come cheap. Bikes cost $2,895 or $3,695, excluding GST, while membership is an additional $59 per month. The app-only product will be available for $16.99 a month.
The Australian business is headed up by Karen Lawson, former managing director of Spotify for Australia and New Zealand, and former chief executive of accelerator program Slingshot.