On-Demand Fitness Startup Peloton Pursues $8.2B Valuation 

Fitness startup Peloton is hoping for an $8.2 billion valuation as it goes public, The Financial Times reported on Wednesday (Sept. 25).

Under the PTON ticker, the company will float 40 million shares of class A common stock on Nasdaq on Thursday (Sept. 26) priced at $29 per share.

The on-demand fitness firm will raise $1.2 billion with the stock offering, nearly doubling its $4.2 billion valuation. Although Peloton’s earnings doubled to $915 million, losses peaked at $196 million over the year to June 30.

A $300 million lawsuit is also hanging over the company after music producers alleged that Peloton didn’t pay licensing fees for the songs used in its workouts. 

 “You will see a lot of investors looking at this and saying what are the lessons learned from Uber and WeWork,” Michael Underhill, chief investment officer for Capital Innovations, told the FT. The fund manager participated in Pelton’s IPO. “I wish them well, but I don’t think this will be a successful IPO.” 

The venture capital firm TCV led Peloton’s last fundraising round in August 2018 and is planning to buy $100 million shares that are separate from the 40 million shares being floated.

The startup sells screen-equipped fitness bikes and treadmills ranging from $2,200 to $4,000 alongside its $40 per month on-demand workouts. People who don’t own Pelton’s equipment can get workouts for $20 per month.

Peloton is providing glimpses into how IoT is evolving and will continue to evolve as more connected devices hook up to the web and each other. The company was founded in 2012 and is the first to combine bikes and treadmills with screens that let people participate in fitness classes with others while in their own location. The company said it wants to allow people at home to enjoy a workout experience “as physically rewarding and addictive as attending a live, in-studio class.”