Tonal — a startup sometimes referred to as the Peloton of at-home strength training — has raised a fresh $110 million of funding to boost its expansion in the crowded home fitness space. And before you ask: Its CEO isn’t worried competition from Apple’s newly announced fitness service.
Tonal, whose product mounts to the wall like a flat screen television and uses “digital weights” where the resistance is personalized, announced Thursday new financing for marketing initiatives and scaling its supply chain and logistics to meet demand. With the new funding, the company has raised $200 million to date and said its current valuation is more than $500 million.
Investors in the round include L Catterton, a private equity firm which has backed a range of consumer startups, as well as the Amazon’s Alexa Fund and several athletes, including Stephen Curry of the Golden State Warriors.
The funding news comes two days after Apple announced plans to launch Fitness+, a subscription service for Apple Watch users that will offer workout classes accessible on iPad, iPhone and Apple TV.
“It is further validation that the world has shifted to workout-at-home,” Tonal CEO and founder Aly Orady told CNN Business. “It was a trend that we saw start a number of years ago and what Covid has done is accelerate that — and Apple is just acknowledging that the world has shifted. People aren’t going to go to the gym as the primary place where they work out anymore. They want to workout wherever they are and we think that is the future.”
The sentiment echoes that of Peloton CEO John Foley, who reportedly referred to Apple’s fitness announcement as a “legitimization” of fitness services.
There are of course big differences between what Tonal and Peloton offer compared to Apple’s $9.99-a-month subcription, specifically pricey proprietary equipment and more expensive subscriptions. For example, the Tonal strength training machine costs $2,995 — not including taxes, delivery and ongoing subscription fees of $49 per month. An extra $495 buys customers a “smart accessory bundle,” which includes add-ons like smart handles, a bench, mat and roller.
According to Tonal’s Orady, his company’s business is performing over “10x” compared to one year ago — a combination of the impact of last holiday season and the pandemic on its business. “We’re well over $100 million run rate in terms of our sales momentum,” he said. “We’re expecting a really, really sizable holiday season.”
The company declined to share how many Tonal machines it has sold to date and how many paying customers it has.
Its business has faced some pandemic-related challenges, according to Orady, with some customers experienced longer wait times in receiving the product.
“We did everything we could. We were chartering aircrafts from Asia, just entire aircrafts full of Tonals just to try and meet the demand,” he said, adding that the move was “pretty drastic.”
Orady founded the San Francisco-based startup in 2015 with the intention of “shrinking” equipment to fit in the home and give the average person guidance on how to strength train.
Tonal customers take classes or programs led by coaches, with artificial intelligence layered on to suggest pacing, instruction, form feedback and more to personalize the experience.
In addition to the funding news, Tonal said that is collaborating with the Mayo Clinic on a clinical trial using its product in physical therapy applications. Mayo Clinic confirmed the trial plans to CNN Business; the results are slated to be released early next year.
Tonal isn’t the only company that has caught the attention of investors in recent months as gyms shuttered and people sought alternative fitness routines. In late June, athletic apparel company Lululemon announced it would purchase the startup Mirror, which sells an immersive mirror through which customers can participate in fitness classes and personal training sessions, for $500 million. Tempo — a home-fitness competitor to Tonal where customers use physical weights — raised $60 million in new financing in late July.