Please ensure Javascript is enabled for purposes of website accessibility

Peloton Stumbles as Rowing Machine Maker Ergatta Attracts Funding, Media Attention

By Rhian Hunt - Apr 29, 2021 at 4:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The plucky upstart competitor uses games rather than live-streamed instructors for its workouts.

After enjoying close to a year of sizzling growth, Peloton Interactive, Inc. (PTON -2.00%) has hit a new hurdle following a recent wrangle with the Consumer Product Safety Commission over alleged potentially lethal safety issues with its Tread+ treadmill. Today, the exercise company's shares have dropped more than 4% after the media spotlight fell on a competitor, New York start-up Ergatta.

Ergatta is another home-workout company harnessing digital technology to give users a challenging, engaging experience. However, unlike Peloton, which focuses on exercise bikes and uses live-streamed or recorded workouts with instructors to motivate its users, Ergatta makes rowing machines. Its software aims at making a workout "feel" "more like playing a sport or a game," providing a "fitness gaming experience" including both solo and competitive modes.

A man using an Ergatta rowing machine while playing a competitive workout game against 7 other users.

Image source: Ergatta.

Today, Ergatta made the news and sent Peloton's stock sliding by reaching a valuation of $200 million. The company announced the receipt of $30 million worth of venture capital financing this morning. Ergatta says it will use the money to create a wider variety of games and workout content for its service.

Multiple firms contributed to the funding, including Greycroft, whose co-founder Ian Sigalow remarked: "I've rarely seen a new consumer brand gain traction this quickly," as reported by Tech Startups. Courtney Robinson, a founding partner of major investor Advance Venture Partners, said Ergatta's "year one growth is a testament to both the demand for gamified fitness and their intimate understanding of the consumer demographic driving that demand."

Meanwhile, investors are watching Peloton for its potentially highly positive third-quarter fiscal 2021 earnings report due out next Thursday. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Peloton Interactive, Inc. Stock Quote
Peloton Interactive, Inc.
PTON
$10.79 (-2.00%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.