Hydrow, the maker of a connected rowing machine, said Tuesday it has secured nearly $200 million in financing after its latest funding round with celebrity backers including Lizzo and Justin Timberlake.

Bruce Smith, founder and chief executive said some of the funds will be used for product development to keep up with holiday demand. Hydrow machines are available for purchase at $2,245. The company also provides on-demand classes such as pilates, yoga, and rowing instruction via a monthly subscription fee.

The company didn’t disclose its latest valuation, but Bloomberg reported in August that Hydrow is in talks to go public through a merger with special purpose acquisition company Sandbridge X2 Corp., in a deal that would value the combined entity at more than $1 billion.

Smith refused to comment.

He said, “This places us in the same group as other leaders in fitness.” People thought we were a small company, so up until now, we may have been under the radar. However, we are very ambitious.

Hydrow raises capital in a moment when consumers return to their gyms and to classes. This forces connected-fitness companies to work harder to reach new customers. There are also more at-home options than ever, from Peloton‘s cycles and treadmills, to Lululemon‘s Mirror, to Tonal, to portable boxing machines. Peloton is said to be creating its own rowing system, potentially giving Hydrow further competition.

Jefferies’ monthly monitoring shows that foot traffic has slowly returned to pre-pandemic levels in fitness centers over the last month. Jefferies discovered that gym visits have returned to roughly 90% of the January 2020 levels as of this month. This is only 1% down from the same time in 2019.

Jefferies reported that most people return to their gyms more often in Texas and Florida than they are elsewhere. New Jersey, New York, and Georgia have the lowest number of visits.

Peloton, BeachBody and other top digital fitness platforms have maintained their position as the most visited in August. Jefferies said.

Randal Konik from Jefferies stated in a research paper that although there had been a significant increase in the use of digital and at home fitness in 2017, we expect this medium to continue to decline in usage. This will allow it to be an addition to the traditional gym experience.

Hydrow offers rowing classes on demand. It was started by Smith in 2017, a former USA Rowing national coach. Kevin Hart, comedian and a founding backer of Hydrow was recently named the creative director.

The company received $25 million in funding from investors, including LVMH-backed L Catterton (private equity firm) and Rx3 Ventures (which was founded by Aaron Rodgers, Green Bay Packers quarterback.

Smith claimed that Hydrow’s 2020 sales rose more than 500% as customers sought ways to work from their homes during the Covid pandemic. According to Smith, Hydrow’s sales increased 300% between June 2020 and the same period last year.

Smith said that Hyrdow was a high-quality commercial product and can be integrated into hotel gyms or apartment complexes. This is a Peloton strategy. It announced this week a new platform for hospitality customers to shop its products, as people begin to leave their homes and Peloton looks for ways to keep building its member base.

Smith explained that the economic recovery will bring additional revenue to Peloton. We are determined to reach every customer.

Hydrow plans to grow its global presence. Hydrow plans to make more on-demand and live content available to users to maintain their engagement.