Tonal Becomes Unicorn With Another $250M Raised
Tonal is now worth $1.6 billion but its CEO said it has to scale up to meet demand before making an IPO.
Tonal, the maker of an eponymous internet-connected weight training system whose profile soared amidst COVID-19-related changes in the fitness industry, announced $250 million in new funding, bringing it to $450 million in total investor dollars, $1.6 billion in valuation and one step closer to an IPO. The investor confidence shows Tonal is poised to move past its trendiness and become a staple of the array of high-tech items investors predict will be in fitness buffs’ homes for the foreseeable future.
The company said it will use the funds on marketing and creating content for its streaming workout channel, while scaling the business and operations to meet the swell of demand. Dragoneer lead the series E round, while Cobalt Capital, L Catterton and Sapphire Ventures also lent funds. Sue Bird, Drew Brees, Larry Fitzgerald, Maria Sharapova and Mike Tyson added their names to Tonal’s already impressive list of athlete endorsers/investors.
The San Francisco-based company also announced a round of hires for its executive team, recruiting people whose résumés include leadership experience at Johnson & Johnson, NBCUniversal, Google and Apple.
Likened visually to a wall mirror connected to presses and resistance bands, Tonal offers internet-enhanced workouts through a connected interface. Inside is an electromagnetic resistance engine offering a variety of weight training routines in a small space. Founded in 2015, it is one of several promising high-tech exercise systems that rode a wave of popularity and investor interest as the COVID-19 pandemic necessitated — even made chic — staying in shape from home. (Of course, it has been called “the Peloton for weightlifting.”)
With a price tag of $2,995, plus $49 a month for a subscription to its video content channel, sales of the Tonal surged 800 percent from December 2019 to December 2020, the company said. The Amazon Alexa Fund became a prominent investor. Tennis star Serena Williams, golfer Michelle Wie and NBA notables Stephen Curry and Paul George all signed up as celebrity investors. Like similar products that suddenly became red-hot last year, Tonal struggled to fulfill orders, leaving buyers waiting weeks for delivery.
Founder and Chief Executive Officer Aly Orady said the new funds will help Tonal meet that challenge, shaping up operations before it possibly opens itself to public investors. He told CNBC, “The first piece of this is really scaling the business and being able to capture all the demand that we have, and preparing the company for an IPO.”
