Maker of stationary bikes Peloton finally revealed some more info of the company’s plan to go public. The fitness startup famous for their on-demand workout programs on exercise bikes, announced they are planning to raise $1.33 billion in an initial public offering (IPO).
Peloton filed to become a public company in August and now, according to a Securities and Exchange Commission filing, they plan to offer 46 million shares at a price range between $26 and $29 per share. If the company succeeds in selling their shares at the high end, they will push their market value to $8.23 billion. Peloton has applied to list the Class A shares on the Nasdaq under the symbol PTON.
The company was founded back in 2012 and has more than 1.4 million members who can access live and on-demand classes from their home. They have been known of succession to raise $550 million in venture capital funding last year at a valuation of only $4.15 billion. The company has in total attracted $994 million in venture capital investment.
Their S-1 filing lists CP Interactive Fitness (5.4% pre-IPO stake), an entity connected to the private equity firm Catterton, TCV (6.7%), Tiger Global (19.8%), True Ventures (12%) and Fidelity Investments (6.8%) as principal stakeholders, or investors with at least a 5% stake in the company. The underwriters to the IPO are pretty big names as well. Among others, there are Goldman Sachs, JPMorgan, Merrill Lynch, and Barclays.
However, last year they had a pretty rough time during which, according to their files, they managed to lose $196 million on sales of $915 million. On the other hand, Peloton reported huge $915 million in total revenue for the year ending June 30, 2019, an increase of 110% from $435 million in fiscal 2018 and $218.6 million in 2017. Its losses, meanwhile, hit $245.7 million in 2019, up significantly from a reported net loss of $47.9 million last year.
Be it as it may, the company gave out the warning that they might not turn a profit or maintain profitability in the future.
Since everyone is shocked with disastrous and probably delayed plans on WeWork IPO, this is a pretty brave thing to do. Peloton has earned itself a valuation of more than $8 billion for its roadshow this week and if most of 2019’s other IPOs are an indicator, it could see its valuation go even higher.
Also, the probable thing to act on upon is their app. Peloton’s app has a better rating (at 4.9 at the Apple App Store) than WeWork and a very satisfied user network too. It is also continuously growing if it’s to believe to Peloton’s Apple App Store Rating Count of how often users provide an assessment of the product. It rose more than 80% since June 30 and keeps on going with more and more people who are buying into the concept Peloton’s founder began the company in 2012.
Also, they seem to believe in themselves because they are staffing up. By doing this, they are potentially taking on more losses in order to just accommodate their clients. The company is hiring more ‘Field Operations’ professionals, who require selling high-end Peloton bikes and treadmills to consumers and then setting the products up in their homes.