Fitness funding, led by Peloton plan for IPO, has investors pumped

Internet-connected-stationary-bike company Peloton, preparing for an IPO, said in August it had raised $550 million, bringing total venture funding for U.S.-based fitness startups to $846 million through Sept. 6.

That’s up 27 percent from $666.3 million in all of 2017.

Investors are eager to get a piece of the fitness sector, where revenue reached $28 billion in 2016, more than double the $12 billion of 2000, a recent Piper Jaffray report shows.

Boutique fitness clubs and gyms are also increasing in popularity, with seven mergers and acquisitions in the sector in 2017 alone, compared with nine from 2013 through 2016, the investment bank’s report says.

But the sector also reflects a broader trend in venture: Investments are consolidating into fewer and larger deals.

So far in 2018, 30 U.S.-based companies in the fitness sector have raised $846 million, according to data from Thomson Reuters. That compares with 2014, when 64 fitness-sector venture deals raised about $373 million. That’s less than half the deals raising more than twice the funds.

And Peloton has dominated other fitness and cycling startups, raising the largest round in the sector every year since 2015, except in 2016, when it did not raise funding, according to the data.

Its $550 million round raised in early August 2018 was led by TCV with participation from Balyasny Asset Management, Kleiner Perkins Caufield & Byers, Tiger Global Management, True Ventures, Wellington Management, Felix Capital Partners and Winslow Capital Management, Thomson Reuters data shows.

The New York company has now raised nearly $1 billion in total funding, and its latest round reportedly pushed its valuation to $4 billion.

The company’s closest competitor in the sector is ClassPass, which in July raised $85 million from Catterton Partners and Temasek Holdings.

Below are the 10 largest venture deals with fitness startups in 2018.

Top-10-U.S.-based-fitness-deals-2018-year-to-date