Peloton Interactive, Inc
Peloton Interactive, Inc. is a prominent health and fitness company known for revolutionizing at-home workouts through its innovative equipment and subscription services. Founded in 2012 by John Foley and a team of partners, Peloton initially gained fame for its stationary bike, which allows users to stream live and on-demand fitness classes. The company expanded its offerings with the introduction of the Peloton Tread, a treadmill designed to provide similar interactive workout experiences. Peloton went public in 2019, raising significant capital despite reporting ongoing financial losses at the time.
Peloton's popularity surged during the COVID-19 pandemic, as many consumers sought home fitness solutions when gyms closed. However, the company has faced various controversies, including lawsuits over music licensing and safety concerns surrounding its treadmill product. Despite these challenges, Peloton has built a substantial member base, boasting 3.3 million subscribers as of 2023. While the company has had a notable impact on the fitness industry, it continues to navigate the complexities of public perception and market demands in a post-pandemic landscape.
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Subject Terms
Peloton Interactive, Inc.
Company information
- Date founded: 2012
- Industry: Health and fitness
- Corporate headquarters: New York, New York
- Type: Public
Overview
Peloton Interactive, Inc. is a fitness company that provides users with at-home workout classes and programs that are streamed over the company’s workout equipment. The company was founded in 2013 by former Barnes & Noble e-commerce executive John Foley. In 2012, Foley had the idea to create a company that made at-home workouts more rewarding. The company began by selling stationary bikes that were equipped with Internet access that could stream workout classes. The company eventually released a treadmill that had the same type of technology. Peloton also created workouts and classes that users could use without their equipment. Users pay an upfront fee for the equipment, and they pay a monthly fee for the classes and workouts. Peloton Interactive, Inc., which is often called simply Peloton, went public in 2019.
History
John Foley developed his idea for at-home workouts in 2012. That year, he secured millions of dollars in investment money and found a number of partners to help him launch the company. The next year, Foley, Graham Stanton, Hisao Kushi, Yony Feng, and Tom Cortese started the company. The name Peloton comes from a French term referring to the main group of riders in a cycling road race. Foley and his partners first put their effort into creating a prototype stationary bike. After the prototype was complete, the company created a Kickstarter campaign that raised more than $300,000 to help fund the project.
The next year, the company received more than $10 million in funding, which it used to improve its prototype bike so it was ready to be shipped to customers. The company started making and selling the bikes, though the process of producing and distributing them was very slow. The company also opened a studio in New York City where instructors recorded their classes.
The company received tens of millions of dollars in funding in 2015. Throughout its history, Peloton received funding from many different sources, including TCV, Tiger Global, True Ventures, Felix Capital, and NBCUniversal. In 2015, Peloton tried to speed up its production of the bikes. The company expanded and hired more workers. It also expanded to include delivery drivers who would deliver and install the equipment in people’s homes. In 2016, the company began offering unlimited on-demand and live classes for a monthly rate.
In 2018, Peloton introduced new features. It released the Peloton Tread, which is a treadmill that streams live and recorded classes as the bike does. The company created running workouts for the Tread, but it also created hiking and walking workouts. The treadmill cost nearly twice the price of the stationary bike, but it became a popular option for Peloton users. Peloton was preparing to go public at the time. A valuation in 2018 indicated the company was worth roughly $4 billion.
The company went public in 2019 with a share price of $29, raising more than $1.15 billion during its initial public offering (IPO). Yet, in the company’s disclosures released before the IPO, Peloton indicated that it had not yet turned an annual profit. Leaders from the company rang the opening NASDAQ bell on the day of the IPO. In 2022, Peloton recorded $358 billion in revenue, with net losses totaling $282 billion. That year, due to recent controversies and the opening up of life after the COVID-19 pandemic saw, Peloton’s revenue decreased while its net losses increased. As of 2023, 3.3 million people are Peloton members.
In fiscal year 2023, Peloton reported revenue of $2.79 billion, a 22 percent decrease from the previous year, and a net loss of $1.2 billion, an improvement from the $2.8 billion loss in fiscal year 2022. At the end of 2023, Peloton had approximately 6.4 million members, with 3 million connected fitness subscribers. In May 2024, CEO Barry McCarthy resigned. Peloton announced a 15 percent reduction in its workforce and a decrease in retail operations due to declining demand for its fitness products post-pandemic. In January 2025, Peter Stern, former Apple Vice President of Services, assumed the role of CEO.
Impact
Peloton helped shape the fitness industry in the United States. The company became especially successful in 2020 when the COVID-19 pandemic and subsequent lockdowns temporarily caused gyms to close. Many people chose to purchase Peloton equipment to complete their workouts at home. They continued to work out at home even after gyms reopened. Although Peloton became a popular fitness company in the late 2010s and early 2020s, the company faced numerous controversies, including lawsuits throughout its history.
In 2019, a music publishers association filed claims against Peloton, stating that Peloton used popular songs in its workout without permission or paying for the music. Peloton removed hundreds of songs from its workout videos; however, the company also countersued the music publishers because it claimed that the producers had a “coordinated effort” to prevent Peloton from using the songs at a reasonable rate. The company also found itself in a legal fight with Eric Villency, the designer who helped create the company’s original stationary bike. Villency claimed that Peloton had infringed on his patent. Again, Peloton countersued Villency.
That same year, Peloton faced criticism for an ad campaign that featured a husband who gave his wife a Peloton bike as a Christmas present. In the ad, the woman chronicles her fitness journey in a video blog. Critics claimed the ad was sexist, as it implied the husband’s gift was meant as a hint for his wife to lose weight. They also claimed it promoted negative body imagery, as the ad’s already-thin woman had no reason to lose weight. The ad was roundly criticized in social media circles and was eventually pulled.
The company also faced scrutiny from consumer advocates in 2021 after multiple children were injured and one died on the Peloton Tread. The US Consumer Product Safety Commission (CPSC) issued a warning about the treadmills, telling users with children not to use the product. The CPSC also urged Peloton to recall the product because of the safety concerns. At first, Peloton resisted recalling the treadmills, but a month after the initial warning, the company recalled the product. The company developed a way to fix the treadmills a few months after the recall happened. However, when Peloton updated the treadmills’ software, it also locked the treadmill for users who did not pay the monthly fee for the streaming service. This action also caused negative media coverage for the company. Again, the company had to backtrack and change the software so all owners could use their bikes, even if they did not pay the monthly subscription fee. Into the mid-2020s, Peloton continued to be involved in litigation regarding trademark disputes and employee compensation. Although the company continued to face challenges, it retained a notable position in the fitness industry.
Bibliography
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