Peloton, the connected fitness company offering home exercise bikes and treadmills with built-in virtual classes, has announced its intention to IPO by filing a confidential draft statement of its S-1 to the SEC. The company is not disclosing the number of shares they plan to offer or their price range.
For those that count Peloton as a digital health company, it constitutes one of the most funded companies in the category with more than a billion dollars after last year's $550 million Series F round. Its valuation has been floated at $4 billion.
Peloton's primary consumer offering is an exercise bike integrated with a tablet-like screen. With this, users can join in live or pre-recorded classes with on-staff cycling instructors. During live sessions, real-time social features like leaderboards or video chats with friends keep users immersed in the process. The company has also launched a connected home treadmill similar to its primary exercise bike offering.
WHY IT MATTERS
When Fitbit went public in 2015 it was seen as something of a validation of wearables as the new face of consumer fitness brands. But in the intervening years, that category has cooled a bit (as has Fitbit's stock price). Peloton and competitors like Mirror, Tonal, and HydroRow represent the latest face of consumer fitness products: high-end, large home devices that bring experiences like gym classes and even outdoor fitness experiences into the home by combining telecommunication and gaming. These companies are certainly doing well at attracting investors, and a Peloton IPO (along with the transparency that comes with it) will shed some light on the profitability and sustainability of this category.
WHAT'S THE TREND
As we noted when news dropped about Livongo's still-forthcoming IPO, digital health has seen only a small handful of IPOs over the years, and hasn't seen one since iRhythm went public in 2016. Other digital health companies that have gone public include Castlight, Teladoc, Fitbit, NantHealth and Senseonics.
As for Peloton, the company has been warping industry funding data with its nine-figure funding rounds since 2017, when a $325 million round officially earned the company its "unicorn" status.
Of course, the company's success has not been without challenges: Just two months ago the company was hit with a $150 million lawsuit from the National Music Publishers Association (NMPA), which claims that Peloton was illegally featuring music from Rihanna, Bruno Mars, Lady Gaga and others. That case is still ongoing.
