Tonal recently completed a Series E round raising $250 million. Dragoneer investment group led the round. Dragoneer is a San Francisco-based, growth-oriented investment firm with three SPACs (special purpose acquisition companies) DGNR, DGNS, and DGNU. It is not a stretch to imagine the next funding round for Tonal could be merging with a SPAC. At a $1.6 Billion valuation currently, it is an attractive option for direct listing in the next 12 months. Time will tell.
It's biggest competitor, Peloton (NASDAQ: PTON) was trading around $25 on its first day on the exchange and today sits around $112 or about 4.5x after going public in September, 2019. Of note, Peloton acquired Precor, one of the largest global commercial fitness equipment manufacturers for $420 million.
This is a major milestone for Peloton and our global community...With Peloton Commercial, we expect we'll be able to not only continue our relationship with our current customers, but scale the Peloton experience that millions of people have at home to even more hotels, campuses, and multifamily residences--William Lynch, Peloton's President
While Initially Tonal might not have considered Peloton a major competitor give the thin line dividing cardio vs. strength training. Peloton is keenly aware of how thin that line is, and that's the acquisition of Precor gives it testing ground for new strength training equipment.
In Tonal's recent round, the power of influencers is not understated as it invited new celebrity investors in this round including Drew Brees, Larry Fitzgerald, Maria Sharapova, Mike Tyson, and Sue Bird. They are joining almost thirty other professional athlete investors like Serena Williams, Stephen Curry, Paul George, and professional golfer Michelle Wie. Talk about star power!
Watch Mike give Tonal a workout.
Right now, Tonal describes itself as the "clear leader in connected strength training" and that is true accounting for 90% of that 'connected' market segment. 2020 was an explosive growth year for Tonal (as it was for other 'pandemic' companies that sell home products). Sales grew more than 800%!
The cost might still be a little expensive for the average household. The impressive sleek home gym with up to 200 lbs of digital resistance costs $2,995. An additional $495 covers the cost of smart accessories such as handles, overhead bar, rope, bench, roller, and a workout mat. Let's say you get a home gym for a cool $3500. The $49 monthly membership unlocks personalized progress tracking & assessments as well as a workout library that includes strength training, bootcamps, yoga, pilates, cardio, among 1000s of other workouts. The monthly membership is required for at least 12 months after purchasing a Tonal.
If you missed our earlier article looking at Zwift, Peloton, and Tonal be sure to check it out here!