Bloomberg has published a new report about the at-home fitness company Tonal. Included in the report: Peloton considered acquiring Tonal in 2022.
Tonal is apparently looking to raise money at a $500 million valuation – which is less than one third of its previous valuation at $1.9 billion. They have also explored a potential acquisition.
In addition, Tonal is contemplating replacing Aly Orady, their current CEO and company founder. Orady launched Tonal in 2015 and if replaced as CEO, could still stay involved in the future. Bloomberg reports that a final decision has not yet been made.
Moreover – Peloton allegedly considered buying Tonal in 2022. Bloomberg reveals:
Tonal previously had discussions with Peloton Interactive Inc. last year about a potential sale to the publicly traded fitness company, the people said. Yet an acquisition did not materialize, in part because Peloton has been trying to improve its cash position and the two parties couldn’t agree on price, they added. Tonal also had acquisition conversations with other strategic buyers, said the people.
Peloton did not respond to Bloomberg’s request for a comment regarding the matter.
Peloton has had a tumultuous past year – and this latest report from Bloomberg is a reminder that they are not alone. The entire home-fitness industry is struggling. As explained by Bloomberg:
It has been a tumultuous time for the home fitness industry. The businesses benefited from the early days of the pandemic, when many gyms were closed and people were stuck at home. But difficulties in maintaining that growth trajectory contributed to a slowdown in some businesses like Peloton. Companies that had raised capital using Peloton’s market capitalization as a comparison are now having to readjust.
As we reported earlier this month, Tonal has announced they are increasing their monthly subscription cost for all members.
Top competitor Mirror was acquired by lululemon for $500 million in 2020, and they recently cut the cost of their device in half. In addition, iFit Health & Fitness Inc. (the maker of NordicTrack) has withdrawn their previously planned IPO (initial public offering).
Peloton recently held their Q2 2023 earnings call, during which they reported a greater-than-expected revenue of $792.7 million dollars.
You can read the complete report regarding Tonal via Bloomberg.
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