Connected Fitness Company ICON Raises $200 Million

ICON Health & Fitness, owner of the NordicTrack, ProForm and Freemotion brands as well as streaming platform iFit, has raised $200 million in its latest funding round, led by early Peloton backer L Catterton. 

NordicTrack and ProForm both make connected stationary exercise bikes at a lower price point than Peloton. Peloton’s entry-level bike is priced at $1,895.

A source “familiar with L Catteron’s thinking” told Axios that the firm “doesn’t view [ICON and Peloton] as direct competitors because ICON has a broader product portfolio.” In May, however, Peloton sued ICON, allegeding that it copied its interactive fitness programs for the NordicTrack, including its live “leaderboard” technology.

“The company’s broad range of products across price points has democratized fitness, making it more accessible to everyone, everywhere,” L Catterton co-CEO Scott Dahnke said in a statement about its latest investment. 

iFit has approximately 700,000 paid subscribers and streams workouts in English, French, Mandarin and Spanish. Pamplona Capital Management, which also invested in the latest round, previously led a $200 million investment in iFit last year. ICON currently holds more than 330 patents and has products in 80 countries, it said.

“Health and fitness have never been more important to consumers globally, and we are seeing explosive growth across our subscription software and fitness equipment businesses,” ICON founder and CEO Scott Watterson said in a statement. “We saw this fast-growing demand going into 2020, and this has accelerated sharply as people’s desire to stay healthy has intensified.”

ICON is now valued at north of $7 billion and is considering going public “within the next year,” according to a Bloomberg source. The company also said it saw over $1 billion in revenue from October 2019 through September. 

Overall, the digital fitness category has boomed amid the COVID-19 pandemic. 

Connected fitness devices accounted for only 2.9% of overall revenue in the fitness equipment industry in 2015, but that figure is expected to exceed 7.5% by the end of this year, according to CB Insights. The home fitness equipment market is on track to hit $4.3 billion in value by 2021.

Peloton’s sales surged to $607.1 million in the fourth quarter of its 2020 fiscal year, a 172% jump from a year earlier. The company ended the quarter with more than 1.09 million connected fitness subscribers, up 113% year-over-year. 

In September, immersive cycling and running online fitness training platform Zwift raised $450 million in a new investment round led by U.S. private equity firm KKR & Co Inc., and connected strength training system Tonal raised $110 million in new capital — also led by L Catterton — with other new investors including Steph Curry.