By CultureBanx Team
- Tonal, the smart home gym-maker backed by LeBron James, Serena Williams and Steph Curry is cutting 35% of its workforce
- The home fitness equipment market that’s expected to reach a value of $23.27B by 2025
Tonal, the strength training home fitness company with several professional athlete superstars on its cap table including LeBron James, Serena Williams and Steph Curry is cutting 35% of its workforce. With the home fitness equipment market expected to reach a value of $23.27B by 2025 and Tonal claims to have 90% market share in the connected strength category, could their dominance be slipping away?
Why This Matters: Back in March 2021, the company was valued at $1.6 billion following a $250 million Series E funding round. It’s an Amazon (AMZN +3.86%) Alexa Fund backed company that has yet to become profitable since its launch in 2015. Now, the fitness company which currently employs roughly 750 people plans to cut back on advertising as a way to alleviate customer acquisition costs.
To date, Tonal has raised $450 million in fresh capital. The company had a growing list of more than 30 elite athlete investors and brand ambassadors who turned to Tonal to support their training. All of these athletes are banking on the home fitness equipment market’s continued growth, along with the fact that Tonal’s system sales increased 800% between December 2019 and December 2020. Clearly things have changed for the smart home gym-maker now that we’re all back outside and Tonal didn’t disclose exactly how much money it plans to save through the layoffs.
What’s Next: Competition is steep in this space with a third wave looming, and brands like Peloton (PTON +17.34%), Tempo and Vi. Tonal is joining a list of companies, including competitor Peloton, which are reducing headcount in order to slash expenses and readjust to new levels of consumer demand due to a looming recession.
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