The company is best known for its expensive connected rowing machines, which cost between $1,700 and $4,000, and is backed by private equity heavyweights such as Constitution Capital and L. Catterton. The company’s investors include several professional athletes and celebrities, including Kansas City Chiefs tight end Travis Kelce and singer Justin Timberlake.
Hydro has raised more than $300 million in funding. The company said it acquired Speede Fitness to expand into strength training, one of the fastest growing areas in fitness today.
The acquisition comes as gym-goers are cutting back on aerobic activities like running and cycling in favor of weight training.
Planet Fitness announced in November that it would replace its cardio equipment more slowly, in part to free up capital.
“Our members consistently want to build more strength and do less cardio,” Planet Fitness Chief Financial Officer Thomas Fitzgerald said during the company’s third-quarter earnings call. he said, adding that the cost of strength equipment is lower than that of aerobic equipment.
Lifetime Fitness highlighted a similar trend. Annual physical fitness survey. More than a third of respondents said their number one goal for 2024 was “building muscle,” an increase of more than 3% year-on-year.
Speede Fitness makes connected strength training machines that look similar to the BowFlex, but include advanced technology such as artificial intelligence-powered cameras, sensors, and large touch screens.
“Strength training is one of the largest addressable markets in the fitness space, and Speede’s advanced technology outperforms current products, making this acquisition an important milestone for both companies,” said Hydrow. ” he said. “This investment supports Hydrow’s mission to expand as a whole-body health company, with consumer products scheduled to come to market next year.”
Hydro’s acquisition and sales growth come as Peloton, credited with creating the connected fitness market, struggles to turn around its sluggish business. During its heyday in the midst of the COVID-19 pandemic, Peloton tried to acquire Hydrow rather than make its own rowing machines, but the company told CNBC it declined. Peloton did not respond to CNBC’s request for comment.
CNBC reported on Tuesday that a number of private equity firms are considering taking Peloton private after the company posted another quarter of declining revenue and losses, and Peloton itself is considering taking the company private. It has become a target.
Peloton said demand for fitness equipment has been weak as consumers cut back on big-ticket items. Still, Hydro has managed to continue to grow while Peloton has shrunk.
Hydrow’s connected rowing machine deliveries increased 23% this year compared to the same period last year. At Amazon, sales increased 273% year over year in the 12 months ending March 31st.
Hydro’s growth raises questions about whether Peloton’s problems are related to weakness in the broader home fitness market or internal stumbles and product failures. Additionally, the company primarily sells cardio machines, which have become less popular with consumers, and its own members are flocking to strength training. The company said strength training content, rather than cycling or running classes, is the most popular type of class for digital members and second among members who own Peloton hardware.
Peloton debuted its rowing machine, the Peloton Row, in September 2022, but did little to promote or highlight the $3,000 machine.
The company previously announced Peloton Guide, an AI-powered device for guided strength training at home, but the device received less attention than its rowing machines.
The Guide received one mention in Peloton’s fiscal third quarter letter to shareholders. The company recorded approximately $9.1 million in write-downs on product inventory.
