Hydro, a manufacturer of $ 2,500 connected rowing machines, said Thursday that it had raised another $ 55 million to drive growth.
In the Series D round, the company said it had total funding of over $ 255 million to date.
Hydrow’s new funding cuts thousands of jobs and costs for the entire business, perhaps after Peloton, the world’s most renowned connected fitness maker, has grown rapidly during the Covid-19 outbreak. This is because we are reducing. Under new CEO Barry McCarthy, Peloton is trying to reset its business to the slow-growing levels seen when consumers leave home and return to the gym.
Peloton’s share price has fallen nearly 80% in the last 12 months, below the IPO price of $ 29. This is throwing clouds at other parts of the industry, especially players such as Hydro in the private market who are considering publishing.
But, according to Bruce Smith, founder and CEO of Hydron, there’s still plenty of room for growth despite the headwinds facing Peloton and the industry. He said the overall penetration of connected fitness into the entire addressable market is still less than 10% today.
“The work we’ve done over market penetration. It’s clear that the pandemic has accelerated penetration a bit, but there’s no change in long-term trends,” Smith said in a recent phone call. .. interview. “In fact, no one returns to the office five days a week, so the pandemic will continue to accelerate demand. The same goes for fitness.”
“People are definitely back in the gym,” Smith said. “We support it, and we will be in your gym in your apartment building. And your home. And that hybrid experience is new and normal in the future.”
Last June, Bloomberg reported that Hydro had a valuation of more than $ 1 billion and was seeking an initial public offering or a merger with a special purpose acquisition company. For comparison, Peloton’s market capitalization has fallen from a high of about $ 50 billion in early 2021 to just over $ 7.9 billion.
Hydrow declined to comment on current ratings and plans to publish the business. Smith, however, said that hitting the public market is still on the card.
“A key part of preparing to become a publicly traded company is the ability to predict … it really rewards your reputation, and we’re focusing on it,” he said. “Every time someone learns about boats, they choose Hydro.”
Peloton is said to be working on its own rowing machine as it develops new products to increase sales. This can lead to loss of future demand from Hydro. Other rowing machine manufacturers include iFit Health and Fitness’s Nordic Track division, CityRow and Ergatta.
Hydrow is not a publicly traded company and does not disclose financial information, but states that 2021 revenues have tripled in 2020. It also states that it currently has more than 200,000 users.
If you already own a Hydrow rowing machine, you can pay an additional $ 38 per month to access your company’s live and on-demand classes. Hydrow also offers digital-only membership for $ 19.99 per month.
The data show how many cardio devices scooped up during the pandemic compared to pre-Covid levels, as many tried to recreate some kind of gym experience at home.
Sales of cardio equipment such as treadmills, stationary bikes, rowing machines, steppers and ellipticals totaled $ 1.5 billion in the United States in 2021, up 95% from 2019 levels, but from 2020 levels. It decreased by 4%. This is due to the data tracked by the NPD Group. However, treadmill sales increased by 5% in 2021 compared to 2020, NPD said.
Hydrow said it will use new funding to support marketing costs and larger brand building, as well as product innovation.
Series D round led It is from Massachusetts-based private equity firm Constitution Capital and has investments from L Catterton, RX3 Growth Partners, Liberty Street, Activant Capital and Sandbridge Capital.
Michael Farello, managing partner of L Catterton, said:
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