Zwift, a 350-employee online fitness platform based in Long Beach, California that immerses cyclists and runners in 3D-generated worlds, has just raised a whopping $ 450 million in funding from investment firm KKR in exchange for a minority stake on their business.
Permira Specialized Bicycle’s venture capital fund, Zone 5 Ventures, also joined the round, along with previous supporters True, Highland Europe, Novator and Causeway Media.
Zwift has now raised a total of $ 620 million and is valued at $ 1 billion.
Why such a big round? At the moment the company only makes one app, albeit a popular one.
Since it was founded in 201
The company declined to share its active subscriber numbers with us – Zwift charges $ 15 a month for its service – but it appears to have a loyal user base. For example, 117,000 of them participated in a virtual version of the Tour de France that Zwift hosted in July after it was selected as a partner for the event by the official race organizer of the real-world tour.
That brings us back to this huge round and what it’s used for. To use the app, Zwift’s bike trailers today have to buy their own smart trainers, which can cost anywhere from $ 300 to $ 700 and are made by brands like Elite and Wahoo. In the meantime, runners are using Zwift’s app with their own treadmills.
Now Zwift is jumping headlong into the hardware business. Although a company spokesperson said it couldn’t discuss details – “It takes time to develop hardware properly, and COVID has put more pressure on production” – it is hoping to launch its first product “as soon as possible bring to”. ”
He added that the hardware will make Zwift a “more immersive and seamless experience for users”.
Either way, the direction is not surprising to the company, and we’re not just saying this because Specialized participated as a strategic backer in this round. Co-founder and CEO Eric Min has told us in the past that the company was hoping to one day produce its own trainers.
Given the runaway success of home fitness company Peloton, it wouldn’t be surprising if a treadmill, or even an entirely different product, followed suit. The Zwift spokesman said: “In the future, it is possible that we will bring in other disciplines or a more playful experience.” (In this case, there will be expert advice in this area, as Swift has just brought Ilkka Paananen, co-founder and CEO of Finnish gaming company Supercell, on board as an investor and board member.)
Meanwhile, the company is telling us not to expect classes that have proven so successful for Peloton and that parallels may be tempting to draw.
While Zwift prides itself on users’ ability to organize group rides and runs, as well as workouts, classes are “not in sight,” the spokesperson said.