What happened
Peloton Interactive (PTON 0.77%), the star fitness stock of 2020, continues to lose its shine this year. The stock fell by 4.2% today; the catalyst for the decline this time is the rising popularity of a potentially serious competitive threat.
So what
Bloomberg reported Thursday that privately held Ergatta has garnered $30 million in fresh investment. This pushes the company's valuation to $200 million -- small compared to large-cap company Peloton, but considerable for a business that launched its product barely over one year ago.
Image source: Getty Images.
Ergatta's specialty is rowing machines, which cost $2,199 a pop. In contrast to Peloton's video-streamed live fitness instructors, its software is based on competitive exercise games. Bloomberg quoted Ergatta CEO Tom Aulet as saying that "Our primary market research identified half the population isn't motivated by instructor-led classes so we developed a solution that has clearly resonated and is quite addictive."
Ergatta takes a page from Peloton's book in offering subscriptions to its software platform; these cost $29 per month, or $290 when billed annually. The company already has roughly 10,000 active users.
Now what
With that kind of performance, Ergatta is sure to attract more investor interest. If it goes public it'll be a compelling alternative to Peloton, which is currently on defense coping with the fallout of a tragedy involving one of its products. Although the rowing machine specialist is unproven on the public markets, Peloton had better keep itself in tight shape -- this up-and-comer is emerging quickly.
