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Hydrow raises millions as at-home fitness industry faces post-Covid reckoning


Hydrow is a maker of the $2,500 connected rowing machines. It announced that Thursday’s funding round has reached $55M.

The company announced that the Series D round increases its total funding by more than $255 million.

Hydrow has received fresh funding PelotonPerhaps the best-known connected fitness brand in the world is. slashing thousands of jobs and cutting costs across the businessGrowing too fast at the peak of the Covid-19 pandemic. Peloton’s new chief executive Barry McCarthy is determined to restructure its business to accommodate the slower growth it expects as customers return to their gyms from home.

Peloton shares have fallen nearly 80% over the last 12 months. They are trading at $29 below the IPO price, which is causing concern for the rest of industry players, especially Hydrow, who has been trying to get public.

Bruce Smith, Hydrow’s founder and CEO, believes there is huge potential for growth despite the challenges that the industry and Peloton are currently facing. According to Smith, the current penetration of connected fitness relative the total market is still below 10%.

“The work that we’ve done around total market penetration — it’s just super clear that the pandemic accelerated penetration for a little bit, but we don’t see any change in the long-term trends,” said Smith, in a recent phone interview. The pandemic will continue to increase demand as no one is returning to work five days per week. The same goes for fitness.

Smith claimed that people are returning to the gym regularly. Smith said, “We are in support of that and will be there in your building’s gym.” You can also do it in your own home. That hybrid experience is what we will continue to call the “new normal”.

In June last year, Bloomberg reported that Hydrow was exploring pursing an initial public offeringMerging with a special-purpose acquisition company at more than $1billion. Peloton has a market cap of just over $7.9 Billion. This is a drop from the high of $50 billion at early 2021.

Hydrow did not comment on the company’s current valuation nor its plans for taking the business public. Smith stated that it is possible to hit the public markets.

He said, “A critical part of being ready to become a publicly traded company is the ability to forecast…that’s really what rewards you valuation. And we are focused upon that.” Hydrow is the first company that people learn about rowing.

Peloton, which is developing new products for growth and sales, may be creating its own rowing machine. It could draw some future Hydrow customers away. Other makers of rowing machines are iFit Health and Fitness’ NordicTrack Division, CityRow and Ergatta.

Hydrow does not disclose financial information as it isn’t a public company. However, it stated that its revenues grew by three-fold in 2021 compared to 2020. The company also claimed that more than 200k customers are registered today.

Hydrow users who own an existing rowing machine may pay $38 more per month for online and live access to the company’s classes. Hydrow also provides a $19.99 digital-only membership.

As many people sought to recreate a workout at home, data shows that cardio equipment was purchased by more consumers than ever before the epidemic.

Sales of cardio equipment — including treadmills, stationary bikes, rowing machines, steppers and ellipticals — totaled $1.5 billion in the United States in 2021, growing 95% from 2019 levels but falling 4% from 2020 levels. This is according to NPD Group data. NPD stated that Treadmill sales increased 5% by 2021 over 2020.

Hydrow indicated that the company will make use of the financing for its marketing needs and to build a bigger brand.

Series D was led Constitution Capital is a Massachusetts-based private equity company. It also invests in RX3 Ventures and Liberty Street.

Hydrow’s continued growth as customers were able go back to their gyms and exercise studios highlights the tailwinds that are driving connected fitness, said Michael Farello (managing partner, L Catterton).