Tonal Seeks Additional Funding or Buyer, Contemplates Replacing CEO
Tonal, the smart home gym with a cult-like following, appears to have been working behind the scenes in a bid for either funding or an exit
Tonal has been strategizing, with the smart home gym reportedly seeking additional funding or a potential buyer.
According to Bloomberg, the tech gym start-up, which is backed by notable athlete investors such as Serena Williams and LeBron James, is also considering replacing its CEO and founder, Aly Orady.
Last summer, CEO Orady stated that Tonal was facing a ‘challenging time’ and was preparing for a possible recession. In response, Tonal laid off 35% of its staff, reduced advertising, and took its LA studio offline. Instead, Orady said Tonal would shift the focus to ramping up its new studio in New York.
Tonal reportedly discussed a potential acquisition with connected fitness giant Peloton last year. However, Peloton didn’t proceed with a sale as it’s been trying to right its own ship, and the two fitness companies couldn’t agree on a price.
Peloton wasn’t the only potential buyer that Tonal approached; the smart home gym has reportedly held discussions with other companies for a possible acquisition.
According to unnamed sources, Bloomberg reports that Tonal is having funding discussions that would value the smart home gym company at $500 million or less, a significant decrease from its $1.9 billion valuation last year.
As far as Orady’s fate, he may be replaced this year but could still play a role within the Tonal orbit. He may also remain CEO of Tonal, but time will tell.
Tonal recently conducted a second round of layoffs and announced it would raise the price of its signature trainer device and membership.
The price hikes, Tonal reps said, resulted from macroeconomic factors and increased supply chain costs.
The cost of the Tonal trainer, which went into effect January 1, rose $500 to a new price of $3,995. Tonal’s membership price increase doesn’t launch until February 21, and members can expect to see the cost rise from $49 to $59.95, plus applicable sales tax.
Tonal argues that its hardware price increase is an ‘incredible value’ compared to the cost of a monthly gym membership and weekly personal training session. The smart home gym platform also allows every household member to have independent accounts for the cost of one price.
Like Peloton, the connected strength-training equipment platform soared to new heights during the pandemic when at-home fitness experienced a boom but has faced similar struggles as Peloton when re-adjusting to a more normalized fitness consumer-driven environment.
As fitness enthusiasts returned to the gym or entered into a hybrid fitness model, some at-home-based exercise brands have been left in the dust. That being said, Tonal has a similar base of devoted fitness buffs who have cultivated a bond with their instructors, if their communities on social media are any indicator.
Fans of Tonal who purchased its strength-based equipment set-up have not only dedicated space for the hardware but have mindfully decorated around the machine. Images are routinely shared on social media of background murals, LED lighting, shelving, or inspirational quotes, with the Tonal hardware as the main focus.
The smart home gym company reached unicorn status in 2021.
