OAKLAND, Calif. (Reuters) – Digital gym-on-a-wall startup Tonal, which sports big names like Stephen Curry, Klay Thompson and Serena Williams as investors, said on Wednesday it raised $250 million in its latest round of funding, valuing the company at $1.6 billion.
The San Francisco startup’s CEO, Aly Orady, said the company’s revenue last year jumped eight times the level of 2019, with the pandemic forcing people to work out at home.
According to data firm PitchBook, home exercise startups raised $3.02 billion in venture capital globally last year, up from $1.79 billion in 2019.
At-home-fitness plays on the stock market have been hit on concern the COVID-19 vaccine rollouts and re-opening of gyms could hurt their prospects.
Peloton Interactive Inc dropped close to 40% from its high in January, and Nautilus Inc lost about 50% from mid-February levels.
“My sense is that the market is over-reacting to reopening,” said Orady, adding that Tonal’s sales momentum is holding up even with the vaccine rollouts. “We don’t believe that people were switching to at-home-fitness temporarily during COVID and intended to go to gyms. It’s accelerated a shift in people’s mindset toward working out at home,” he told Reuters.
Orady, a supercomputer engineer who struggled with his own weight problem, Type 2 diabetes and sleep apnea, quit his job in 2013. He dropped 70 pounds and started strength training at the gym when he had the idea for Tonal – to pack massive gym equipment into a compact wall hanging.
The $3,000 mirror-like box streams video coaching and adjusts its weights according to the person using it to work out. The video coaching requires a monthly subscription.
Tonal said the latest round, led by Dragoneer Investment Group, an investor in Airbnb, DoorDash and Peloton, brings the total raised to $450 million.
Reporting By Jane Lanhee Lee; Editing by Dan Grebler
