Peloton: like Apple Inc. for your rich neighbor


Emailed on August 30th, 2019 in The Friday Forward

Connected fitness company Peloton yesterday filed for a $500 million IPO, and reported a $196 million net loss on $915 million in revenue for the year ending June 30, 2019.

Peloton will be the first post-labor day IPO and is one company that's incredibly hard to put in a box (crossfitters, did I do that joke right?).  

It’s a hardware maker that’s also a subscription content creator that’s also a streaming software company that also does its own last-mile logistics.  "CEO John Foley is known to prompt cynical chuckles by calling Peloton the next Apple, but it’s hard to think of a much better comp," according to Dan Primack of Axios. 

The IPO filing shows that hardware revenue tops software revenue by about a 6-to-1 margin, which makes sense given the high price points for Peloton’s bikes and treadmills (no sales breakdown by device type).

There's a lot of analysis on Peloton's churn as a factor in valuation, but it's hard to peg what an acceptable rate would be considering it's not a SaaS company, or a gym, or a traditional consumer app. Expect more talk on this during the IPO roadshow. 

Side bar: All this talk of Peloton reminds me of one of my favorite Twitter threads by Clue Heywood, where he captions the ridiculous Peloton "customer photos" with real-world captions. 

For example, this gem: "When we visited my parents for Christmas I had to put my Peloton bike right in the living room, they didn’t have a home gym or a conservatory or anything ugh."

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Sean Steigerwald