Health & Fit Tempo, Maker of $1,995 ‘Smart Gym,’ Is Valued at $250 Million

15:58  29 july  2020
15:58  29 july  2020 Source:   msn.com

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(Bloomberg) -- Tempo, which makes an at-home workout tool that retails for $1,995, has raised new capital valuing it $250 million amid a surge in demand for fitness products that don’t require a trip to the gym.

The San Francisco-based startup raised $60 million, led by Norwest Venture Partners and General Catalyst, founder and Chief Executive Officer Moawia Eldeeb said in an interview. Fresh capital will be used to boost the company’s manufacturing capabilities and to fund a second production studio where it will film classes like high-intensity interval training and weight lifting that users can stream on the device.

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The Tempo funding round comes during a period of prosperity for at-home fitness companies as consumers wary of the pandemic set up their own home gyms. Industry giant Peloton Interactive Inc. has seen its stock soar nearly 130% this year. Tempo rival Mirror, which makes a similar piece of at-home equipment, was just acquired by Lululemon Athletica Inc. in a $500 million deal. Another maker of wall-mounted workout stations, Tonal, is seeking funding.

“Covid changed the landscape completely; I expected we’d be where we are today in five years,” Eldeeb said. The company’s machine has only been available for purchase since February, and he says it’s on track to end 2020 with $100 million of run-rate revenue.

Monthly Installments

Tempo’s tool, which it describes as a studio, relies on artificial intelligence and 3D sensors to interact with users when they exercise, including by giving feedback on their weight-lifting form, advising on weight selection and counting repetitions. It was created to “democratize” personal training, which is effective but costly, Eldeeb said.

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Still, with a nearly $2,000 pricetag, about 75% of customers are financing the product, which can be paid off in $55-per-month installments over three years. That doesn’t include an additional $39 per month subscription for content.

Existing investors that participated in the funding round include DCM, Bling Capital, Founders Fund, SignalFire and Y Combinator, while new angel investors include Mindstrong Chief Executive Officer Daniel Graf -- a former executive at Uber and Twitter -- as well as Shiva Rajaraman, a former WeWork, Spotify and YouTube executive.

Apartment Amenity

“We believe the at-home fitness trend is here to stay, that technology is really transforming the fitness industry and that there’s significant runway for Tempo,” General Catalyst managing director Holly Maloney said in an interview.

General Catalyst estimates that the U.S. digital fitness market is $10 billion to $15 billion in size and still growing. Maloney and Norwest’s Edward Yip are joining Tempo’s board.

Separately, commercial real estate developer Tishman Speyer, which also invested in the fundraising round, has inked a distribution partnership with the startup and is planning on including the Tempo studio in some of its apartments as an amenity. Starting in August, Tempo will be available on Best Buy Co.’s website and in stores after that, Eldeeb said.

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Gyms aren’t making it easy for people to cancel memberships .
Canceling or freezing a gym membership pre-pandemic wasn’t easy, and now it’s even trickier.She began emailing addresses she found on Crunch’s corporate site, but got a message back noting that “our systems are frozen and our staff is minimal.” When her gym outpost opened, she called directly to cancel but was told she had to visit in person to do so.

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