Tempo, which manufactures a $1,995 home exercise tool, has raised a new $250 million capital value amid a major demand for fitness products that require going to the gym.
The San Francisco-based startup grossed $60 million, led by Norwest Venture Partners and General Catalyst, said founder and CEO Moawia Eldeeb in an interview. The new capital will be used for the company’s production functions and to finance a production studio of times in which it will film courses such as high-intensity periodic education and weightlifting that users can transmit on the device.
Tempo’s investment cycle reaches an era of prosperity for home fitness companies, as distrustful consumers of the pandemic set up their own home gyms. Industry giant Peloton Interactive Inc. has noticed that its inventory increased by nearly 130% this year. Mirror, Tempo’s rival, which manufactures similar gadgets in the house, has just been acquired through Lululemon Athletica Inc. on a $500 million contract. Another manufacturer of educational wall stations, Tonal, is looking for investments.
“Covid has absolutely replaced the picture; I hoped we’d be where we are today in five years,” Eldeeb said. The company’s device can only be purchased since February and says it’s on track to end 2020 with $100 million in operating revenue.
The Tempo tool, which he describes as a study, relies on synthetic intelligence and 3-d sensors to interact with users when exercising, adding comments on their weightlifting form, advising on weight selection and counting repetitions. It was created to “democratize” non-public training, which is effective but expensive, Eldeeb said.
However, with a value label of approximately $2,000, approximately 75% of consumers finance the product, which can be refunded according to monthly fees of $55 for 3 years. This does not come with an additional $39 consistent with the monthly subscription for content.
Existing investors who participated in the funding cycle come with DCM, Bling Capital, Founders Fund, SignalFire and Y Combinator, while new angel investors come with Mindstrong CEO Daniel Graf, a former Uber and Twitter executive, and Shiva Rajaraman, a former WeWork executive. , Spotify and YouTube.
“We believe that the trend of domestic fitness is here to stay, that that generation is transforming the fitness industry and that there is a vital advantage for Tempo,” Holly Maloney, General Catalyst’s executive leader, 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.