Peloton Pedals Ahead with $30M More, Plans to Double Engineering Team
It looks like the team at Peloton is working up a sweat, having bagged another $30 million for its exercise bikes that stream video classes.
Earlier this month, Peloton closed on the Series C round led by True Ventures and Tiger Global Management. John Foley, CEO and founder of Peloton, says the new funding will help his company roll out more stores and build up its technical staff.
“One of the biggest things we’re doing with the money is to increase our software engineering team in New York,” he says. The company currently has 25 engineers with plans to expand to 50 by year’s end, says Foley. There are plans to add more features to the stationary bikes, equipped to stream live classes from the company’s studio in Chelsea and on demand cycling videos.
Peloton is also seeing its sales scale up. Foley says the company’s revenue is on track to grow from $10 million in 2014 to $50 million for 2015. There are nearly 10,000 users of Peloton, he says.
Foley seems to have found the path he wants the company to follow, which included a bit of a change in course. Peloton started out with a plan to develop software that would run on third party platforms, but he says it soon became clear that Peloton needed its own equipment. “We were thinking about building on an iPad but we wanted something more immersive,” he says. The tablet Peloton designed is four times the size of an iPad, he says, and is waterproof so it can handle sweat.
Peloton then decided to stream content itself rather than work with a partner; a move that Foley says lets instructors at the studio give live encouragement to individual participants in classes.
Founded in 2012, the company has raised $44 million in total funding so far. Peloton sells its cycles at stores in New York, Massachusetts, New Jersey, Virginia, and California.
With the latest influx of capital, Foley says he wants to build up the consumer awareness of the brand in a way that extends beyond the product category. “You know Nest, not because you love thermostats, but because you are interested in technology and consumer products,” he says. “We want Peloton to be of that ilk.”