Peloton Raises $75 Million From Serial Fitness Backer Catterton

  • Indoor cycling company plans to expand its store network
  • Consumer-focused firm owns Pure Barre, CorePower Yoga stakes

Indoor cycling fitness company Peloton Interactive Inc. is raising $75 million by selling a stake to Catterton, a private equity firm focused on consumer businesses.

Peloton’s management plans to use the proceeds to accelerate the nationwide roll-out of its store showrooms, founder and Chief Executive Officer John Foley said in an interview. Unlike traditional cycling studios that provide exercise classes, Peloton customers buy a $1,995 bike equipped with a tablet computer and pay a monthly subscription fee to follow exercise classes streamed live from its studio.

The company has a dozen showrooms, mostly on the East Coast, with outlets in California and Dallas, according to its website. Its New York City location also includes a studio where members can take classes.

“We think we are significantly stronger with Catterton as a strategic partner joining our board, given their experience with consumer brands,” Foley said. “We have a bigger balance sheet with which we can be progressive.” The size of the stake wasn’t disclosed.

The investment comes seven months after New York-based Peloton raised $30 million from investors, including True Ventures and Tiger Global Management. The company has seen about a fivefold increase in membership each year since it was founded in 2012, and is now profitable with about 100,000 users globally, said Foley.

“John and the Peloton team are pioneering the next evolution of fitness and changing the way people consume fitness at home,” Marc Magliacano, partner at Catterton, said in an e-mailed statement.

Private-equity backed fitness companies are taking advantage of U.S. consumers’ determination to get fit. Rival indoor cycling club SoulCycle Inc. filed for an initial public offering in May, with a placeholder fundraising amount of $100 million. SoulCycle’s regulatory filing said its yearly net income had more than tripled since 2012.

Greenwich, Connecticut-based Catterton has about $4 billion under management. Its previous fitness-related investments include Pure Barre fitness studios and CorePower Yoga, according to the firm’s website.

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