Peloton Interactive, the stationary bike startup that connects consumers with virtual spin classes, may be looking to raise $120 million at a valuation of $1.2 billion, people familiar with the company told Bloomberg.
The New York–based company sells exercise bikes equipped with tablets that enable cyclists to subscribe to spin classes, enabling them to enjoy the workout class atmosphere from the comfort of their own home.
In just five years, the Peloton brand has developed a cult following for its products and services.
The bikes alone costs $1,995 with a $250 delivery fee, and consumers also pay $39 each month to subscribe to classes.
To date, the company has raised $120 million from investors, including private equity firm L Catterton and technology venture capital firms True Ventures and Tiger Global.
Though it’s possible that in an economic downturn people may look to cheaper exercise options, Paul Swinand, an analyst at Four Hills Advisors, told Bloomberg that during the recession in 2008, many people actually exercised more because they had more time on their hands to do so.
This could point to the chance that if needed, they would let go of an expensive gym membership versus a Peloton subscription.
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