Hydrow acquires Speede Fitness, grows as Peloton shrinks

The company, which is best known for its pricey connected rowing machines that cost between $1,700 and $4,000, is backed by private equity heavyweights such as Constitution Capital and L.C. Catterton. It counts many professional athletes and celebrities among its investors, including Kansas City Chiefs Travis Kelce and singer Justin Timberlake.

Hydrow has raised more than $300 million in funding. It said it acquired Speede Fitness so it could expand into strength training, one of the fastest-growing fitness sectors today.

The acquisition comes as gym-goers are turning away from cardio exercises like running and cycling in favor of weight training.

Planet Fitness said in November it would replace cardio equipment more slowly, partly to free up capital.

“Our members are constantly seeking more strength and less cardio,” Thomas Fitzgerald, Planet Fitness’s chief financial officer, said on the company’s third-quarter earnings call.

Life Time Fitness highlighted a similar trend in Annual physical fitness survey. More than a third of respondents said “building muscle” was their top goal for 2024, an increase of more than 3% from the previous year.

Speede Fitness makes a connected strength-training device that looks a bit like the BowFlex, but includes advanced technology like cameras, AI-powered sensors, and a large touchscreen.

“Strength training has one of the largest addressable markets in the fitness industry, and with Speede’s advanced technology outperforming existing offerings, this acquisition is a major milestone for both companies,” Hydro said. “This investment supports Hydrow’s mission to expand as a whole-body health company… with a consumer product expected to come to market next year.”

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Hydrow’s acquisition and sales growth comes as Peloton, credited with creating the connected fitness market, struggles to turn around a slowing business. At the height of the COVID-19 pandemic, Peloton tried to acquire Hydrow instead of building its own rowing machine, but the company refused, she told CNBC. Peloton did not respond to CNBC’s request for comment.

Now, Peloton is a takeover target in its own right, with several private equity firms considering taking it private after it posted another quarter of declining sales and losses, CNBC reported Tuesday.

Peloton said demand for its fitness equipment has been sluggish as consumers pull back on purchasing big-ticket items. However, Hydro has managed to grow while Peloton has shrunk.

Hydrow’s delivered unit sales of its connected rowing machine jumped 23% this year compared to the same period last year. At Amazon, sales increased 273% during the 12 months ended March 31 compared to the same period a year earlier.

Hydrow’s growth raises questions about whether Peloton’s problems have more to do with weakness in the broader home fitness market or its own internal stumbles and product missteps. In addition, the company primarily sells cardio equipment, which is no longer popular with consumers, and its members are flocking to strength training. The company said its strength training content, not cycling or running classes, is the most popular type of class for digital members and No. 2 among those with Peloton devices.

Peloton debuted its rowing machine, the Peloton Row, in September 2022, but didn’t do much to advertise or highlight the $3,000 machine.

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It previously debuted the Peloton Guide, an AI-powered device for guided strength training at home, but the device received less attention than the company’s rowing machine.

In Peloton’s third-quarter financial shareholder letter, the guide received one mention. It was a $9.1 million write-down that the company took on its product inventory.

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