One of the newest unicorns has landed in the Seattle area.
Peloton, maker of the $2,000 high-tech spin bikes that is now valued at more than $1 billion, debuted a new showroom at the Bellevue Square shopping mall this past weekend.
The New York-based company, which just closed a $325 million Series E funding round from investors like Kleiner Perkins and Comcast NBCUniversal, can be described as an exercise equipment manufacturer, but it is also very much a technology company.
Peloton bikes come with a large built-in tablet stocked with more than 4,000 different on-demand classes and 14 daily live-streamed sessions; its home-based spin class model is meant to stand out from the variety of companies like SoulCycle and Flywheel that offer studio classes.
“Our technology is the backbone of our company — it is what allows us to have a completely vertically integrated product that lets you have your very own private cycling studio at home,” Peloton President William Lynch told GeekWire.
Peloton charges a $39 per month subscription fee to access its live streaming content. According to The Wall Street Journal, Peloton brought in $170 million in revenue in 2016, close to triple its 2015 revenue of $60 million.
The 400-person company, which launched in 2011, counts nearly 500,000 members across its platform and has sold 113,000 bikes. Peloton also operates 20 retail showrooms like the one that just opened in Bellevue.
GeekWire caught up Lynch, the former CEO of Barnes & Noble who oversaw the launch of the NOOK device and was named Peloton’s president in February, to learn more about the company and how it uses technology.
GeekWire: Can you tell me about the technology Peloton uses? Why is it important for the company?
Peloton President William Lynch: “Our technology is the backbone of our company — it is what allows us to have a completely vertically integrated product that lets you have your very own private cycling studio at home. Without our proprietary technology, we wouldn’t be able to allow people to take live and on-demand group fitness classes from the comfort and convenience of their own homes led by elite NYC instructors. The software embedded in the
bike’s 22-inch HD touchscreen gives you instant access to classes, performance tracking metrics and a motivating real-time leaderboard — which means you can track your progress over time and within a class, and push yourself to get better and better the more times you ride.
The technology Peloton uses is proprietary — we have a full army of software engineers and a studio content team working on making sure the streaming is perfect from our studio in NYC to our members’ bikes all around the world. TheStudio, located at 140 W. 23rd St., is the only studio that streams live content to bike owners at home around the world. It includes four specialized cameras that operate in very low light to capture every angle of the instructors’ and class’ performance. Classes are produced by a technical director and floor producer from our in-house control room using the latest production equipment.
Our software engineering team includes front-end, back-end, Android & iOS developers. They are responsible for maintaining and improving the Peloton software platform so that riders can browse their past performance, connect with other riders, and discover new rides. They are also responsible for programming the completely custom Peloton operating system for streaming all content. Our platform allows us to process users’ real time bike metrics into competitive leaderboards.”
GW: What is the company’s target market?
Lynch: “When John Foley and the founding team first brought Peloton to market, they believed that other people were looking for the power of group fitness within the comfort of their own homes. And in just a few short years, that belief has been validated.
The market for at-home fitness is huge; in fact, more Americans work out at home than anywhere else. Peloton has capitalized on this opportunity, tripling its membership over the past year and earning a Net Promoter Score of 91 among members. Over eight million workouts have been taken by Peloton riders, and together members have burned more than three billion calories — but we know there is so much room to grow and reach more people.
Our target market is anyone who’s serious about health and wellness — whether you’re a stay-at-home mom with two kids or a single guy working long hours in the city. If you’re a time-starved, health-conscious individual who loves being motivated, challenged, but also having fun while you work out, the bike is for you. And that’s what we want to show you.”
GW: What is your secret sauce?
Lynch: “Our secret sauce is being able to deliver one of the best cardio workouts on the planet, to people in an incredibly fun and immersive experience in the convenience of their home.”
GW: Who are your competitors? How do you differentiate from them?
Lynch: “Peloton created a category. There are people doing studio/group fitness, and there are others doing at-home fitness equipment or apps, but there are drawbacks with each. Studio fitness tends to be inconvenient, and at-home fitness equipment/apps end up collecting dust or going unused because they just aren’t motivating enough day to day.
Peloton has created an entirely new category of fitness. We have merged the best of studio fitness classes and the convenience and comfort of working out at home with our vertically integrated platform that includes software, hardware and content. With the success we’ve seen in this category we’ve created, we have always expected there would be competition and I’m sure we’ll see more of that in the coming years as fitness continues to be an even more important factor in people’s lives.”
