Peloton covets recurring revenue

AS ANYONE IN a CrossFit class or Bikram-yoga studio will tell you, fitness is full of fads. Few make it to the stockmarket. But on August 27th Peloton, an American firm founded in 2012, announced it had filed paperwork for an initial public offering. Peloton describes itself as a “technology fitness media design software retail product apparel experience logistics” company. Its investors reckon it could be worth $4bn.

Stripped of the aspirational jargon, the firm is in the business of selling high-tech (and high-priced) home exercise bikes. Each bike, which costs $2,245, comes with a touchscreen, a version of Google’s Android operating system and an internet connection. For a monthly fee, users can tune into streamed exercise sessions, either live or pre-recorded, complete with leaderboards and statistics. The effect is a mix of a studio spinning class and a YouTube live stream, as perky instructors give shout-outs to individual users who are puffing away in their living rooms hundreds of miles away. For those who dislike cycling, a $4,295 treadmill is also available.

Like many of the current crop of tech “unicorns”—private companies with a valuation of $1bn or more—Peloton does not do anything so unfashionable as making money. It lost $196m in the 12 months to June, up from $48m the year before, as it threw money at...



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