High-end fitness startup Peloton Interactive Inc has raised around USD 1.12 billion in its initial public offering by selling around 40 million shares. The startup, which is famous for on-demand workouts programs on high-priced treadmills and exercise bikes, collected this amount after pricing its IPO at USD 29 per share. After raising this amount, the value of the trendy digital fitness startup has raised to USD 8.2 billion. This is a notable achievement for Pelton as it comes at a time when some of the best companies like Uber and WeWork had a rough road to the public markets. Notably, WeWork recently postponed its IPO and ousted co-founder and chief executive officer Adam Neumann.
The company is elated with the response as its IPO didn’t turn a profit for at least past three years. The New York-based fitness hardware company priced its IPO at USD 29 compared to a price range of USD 26 to USD 29. But this doesn’t mean that everything is going good as it is facing some hurdles as well. Peloton doubled its revenue to USD 915 in the year ended June 30 but net losses also widened to USD 195 million from USD 47 as costs of marketing and sales to catch the attention of new customers continued to grow. Apart from this, the company is in a legal battle with at least 10 artistic groups and music publishers which accused the company of using over 2200 songs without paying a license fee. The lawsuit is asking the fitness startup for USD 300 million.
Founded in 2012, Peloton is known for USD 2000 stationary exercise bike and streaming workouts. Purchasing these bicycles requires membership to access on-demand and live classes from home. The company, which already has over 1.4 million members, confidentially filed to go public back in June but the stock is due to begin trading on the Nasdaq Stock Exchange under the symbol PTON. In its S-1 filing, the company said that its fastest-growing demographic is people under 35 years old.