By CultureBanx Team
- Tonal, the smart home gym-maker’s valuation has fallen to $500m from $1.9B as it seeks new funding
- Tonal is backed by star athletes including LeBron James, Serena Williams and Steph Curry
Tonal, the strength training home fitness company with several professional athlete superstars on its cap table is now seeking more funds at a valuation of only at a valuation of $500 million or less. This is significantly less than its peak valuation of $1.9 billion in September last year, according to Bloomberg. The star-studded group of investors including Serena Williams, LeBron James, Steph Curry and Mike Tyson had previously spurred existing investors like private equity firm L Catterton along with investment firm Dragoneer Investment Group to take Tonal to the next level.
Why This Matters: Tonal’s $3,995 machine soared in popularity during the pandemic along with its deep roster of investors. 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.
Back in March 2021, the company was valued at $1.6 billion following a $250 million Series E funding round. To date, Tonal has raised $450 million in fresh capital.
Perhaps much of the decline can be attributed to the connected fitness trend that’s also rocked competitors like Peloton very hard. At one point Peloton was even in talks to possibly acquire Tonal last year, according to Blomberg.
Clearly that didn’t happen and the company cut 35% of its workforce in July of 2022. At the time the fitness company employed roughly 750 people. With the home fitness equipment market expected to reach a value of $23.27 billion by 2025 and Tonal claimed to have 90% market share in the connected strength category, it’s possible their dominance could be slipping away?
What’s Next: Competition remains steep in this space with brands like Peloton, Tempo and Vi wanting a larger share of the connected fitness market. Tonal hasn’t disclosed when they expect this funding round to close. Also, the company is reportedly looking to replace its CEO, currently founder Aly Orady, according to “people familiar with the matter” who spoke with The Information.
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