Peloton Interactive, the exercise equipment and class provider backed by mass media group Comcast NBCUniversal and cosmetics distributor Grace Beauty, went public today in a $1.16bn initial public offering.
The company floated on the Nasdaq Global Select Market after pricing 40 million class A shares at the top of the IPO’s $26 to $29 range.
Growth equity firm TCV paid $100m for almost 3.45 million class A shares, which have the same value but 5% of the voting rights of the class B shares owned by Peloton’s existing shareholders.
Founded in 2012, Peloton sells advanced exercise bikes and treadmills with attached video screens that broadcast live video gym classes that are available through a paid subscription plan.
The company’s community has some 1.4 million members, and it more than doubled revenue to $935m in the first half of 2019, though its net loss also increased, from $47.9m in the first half of 2018 to nearly $196m a year on.
Peloton had received some $995m in funding prior to the offering, including a $550m series F round led by TCV in August 2018 that included Comcast NBCUniversal, financial services group Fidelity, Wellington Management, Kleiner Perkins Caulfield & Byers, True Ventures and Balyasny Asset Management.
The series F round, which was closed at a $4.15bn valuation, followed a $325m series E in mid-2017 featuring all the series F investors bar TCV, in addition to GGV Capital and QuestMark Partners, valuing the company at $1.25bn.
Private equity firm L Catterton had invested $75m in Peloton in late 2015 following $30m from Tiger Global Management and True Ventures earlier in the year. Grace Beauty reportedly took part in its 3.5m series A round in 2012 through investment vehicle Grace Beauty Capital.
Comcast NBCUniversal is not among Peloton’s main shareholders and nor is Grace Beauty Capital. Tiger Global Management owns 19.8% its class B shares, True Ventures 12%, Fidelity 6.8%, TCV 6.7% (in addition to 7.9% of its class A’s post-IPO), and Catterton affiliate CP Interactive Fitness 5.4%.
The underwriters have the 30-day option to buy a further 6 million shares, which would boost the size of the offering to more than $1.33bn. Goldman Sachs and JP Morgan Securities are lead bookrunning managers for the IPO while BofA Merrill Lynch, Barclays Capital, UBS Securities and Cowen are bookrunning managers.
The co-managers are Canaccord Genuity, Evercore Group, JMP Securities, KeyBanc Capital Markets, Needham & Company, Oppenheimer, Raymond James, Stifel Nicolaus, SunTrust Robinson Humphrey, William Blair, Telsey Advisory Group, Academy Securities, Siebert Cisneros Shank & Co, R. Seelaus and Williams Capital Group.
Photo courtesy of Peloton Interactive, Inc.
