In the Peloton competition with gymnasiums, the Strava fitness app can win


More than 400 hardware devices can connect to Strava, including home fitness and gym equipment, smartwatches and bike computers, and the company claims it has uploaded more than 1.1 billion activities to its platform. form last year.


When this year’s Tour de France left the city of Brest on June 26, most of the 184 professional cyclists were connected to Strava.

The same is true for millions of recreational athletes around the world, from runners in Rio to swimmers in Switzerland to mountaineers in Montana. There were also legions of Strava users indoors, on Peloton stationary bikes and treadmills, Zwift “smart” trainers and NordicTrack rowers.

The Strava mobile fitness app tracks over 30 different activities in real time and uploads speed, distance, cadence and other performance data to a platform where 86 million users can analyze their own workouts, share and compare them with other users and engage in friendly challenges with friends and strangers. Its popularity skyrocketed amid the pandemic as gyms closed and home and away workouts boomed.

“We have seen tremendous growth in our community,” said Michael Horvath, CEO of Strava. “There were months in 2020 where we had three million new enrollees, and we’re now at around two million per month, double it from before Covid. This represents Strava motivating people, helping them get through this time. and giving them the opportunity to connect with other people. “

From the Harvard Row team to the valuation of a $ 1.5 billion start-up

Strava, which is privately held, was started in 2009 in San Francisco by Horvath and Mark Gainey, former Harvard rowing teammates who are now CEO and executive chairman respectively. The company has around 270 employees and additional offices in Denver, Bristol, England and Dublin, Ireland – locations overseas due to the fact that over 80% of Strava users are located outside of the United States.

Over 95% of these 86 million users have free access to Strava; others pay a monthly subscription of $ 5 for additional features. Although Strava does not report revenue, analytics firm Sensor Tower estimates it made $ 72 million last year, up from $ 60 million in 2019, apparently by selling data, rights to partners. who sponsor challenges and memberships.

Strava raised $ 110 million in new funding in a Series F round last fall led by TCV and Sequoia, valuing the company at over $ 1.5 billion. The founders said it was not yet a profitable business.

Connection with all kinds of workouts

More than 400 hardware devices can connect to Strava, including home fitness and gym equipment, smartwatches and bike computers. The company said it downloaded more than 1.1 billion activities to its platform last year, a 33% increase from 2019. This matches the major increase in sales of fitness equipment from companies like Peloton.

“Thanks to Covid, there has been a significant awareness of the importance of physical activity in people’s lives,” said Tom Cove, president and CEO of the Sports and Fitness Industry Association in Washington. , DC, which represents manufacturers and retailers.

At last count, said Horvath, “nearly 50 million Peloton activities have been uploaded to Strava,” acknowledging the synergy of its partnerships with equipment manufacturers. “As a hub of the connected fitness landscape, we offer athletes the perfect place to stay in touch with their communities after training is over. “

The continued success of fitness products seems to be a good harbinger for Strava.

According to retail research firm NPD Group, from March to October last year, revenue from health and fitness equipment more than doubled to $ 2.3 billion. Sales of stationary bikes nearly tripled, while sales of treadmills rose 135%. “In the first three months of this year, retail sales are up 30% compared to the same period last year,” said Matt Powell, vice president and senior industry advisor for NPD. Sales in March, however, were flat compared to this month a year ago, which he predicts as a proxy for the remainder of 2021.

Platoon in particular has grown as a result. Revenue for its fiscal year 2020, which ended June 30, grew nearly 100% year-over-year to $ 1.8 billion, and revenue from management projects in the fiscal year 2021 will be higher, up to $ 4 billion, Peloton expects $ 165 million loss on treadmill recall. As of March 31, the New York-based company had more than 54 million members, each paying a monthly subscription of $ 12.99 for digital access to live and on-demand courses or $ 39 for an extended suite of features, in addition to paying between $ 1,895 and $ 2,345 for a Peloton bike or up to $ 4,295 for their treadmill, which is currently not available in the US as the company is working on a solution. security issues.

Softening of peloton demand

There may be a slowdown in this demand as in-person workouts and gyms reopen. Wedbush Securities demoted Peloton last week, saying the company has seen a drop in client engagement, based on an analysis of social media trends and internet research.

“PTON is now embarking on the next step in its growth story, a step that, in a post-pandemic era, will require the company to generate its own momentum through savvy marketing and compelling new products.” , wrote Wedbush analysts in their note.

Peloton declined to comment for this article.

Connectivity to Strava has helped propel Zwift, a game-like online cycling platform that allows subscribers who pay $ 14.99 per month to create animated avatars of themselves that ride around the virtual realm from within. Typically, a real-world rider attaches the back of their road bike to a smart, digitally-controlled trainer, linked to an app that simulates their avatar riding a real route – from a local favorite to a mountain stage in the Tower – seen on a monitor, tablet or smartphone. The trainer automatically increases and decreases resistance to mimic the altitude of the route. About 75% of Zwifters upload their trip data to Strava and log into its features.

My theory is that if you spend a few thousand dollars to buy equipment for your home, it is very unlikely that you will pay $ 50 per month to go to the gym and exercise on the same machine.

Matt Powell, VP and Senior Industry Advisor for NPD

Since Zwift’s inception in Long Beach, California, in 2014, 3.5 million accounts have been created. The company did not provide the current number, but said the figure doubled in fiscal 2021, which ended in March. Strava said 100 million Zwift activities have been uploaded to its platform, including thousands of grueling “Everstings,” a single virtual ride that climbs in total to at least 29,029 feet, the height of Mt. Everest. During the global Covid lockdowns last year, Zwift hosted a virtual Tour de France, with rankings for both men and women.

“Zwift is a platform for people to hunt for the carrot they are looking for,” said co-founder and CEO Eric Min. “Motivating people to do more is our goal. “

While subscriptions are “really where the value is for us as a business,” Min said, the company is developing its own smart trainers and indoor bikes, which are expected to hit the market next year. Zwift won’t be removing its existing hardware partners, including Wahoo, Elite, and Tacx, “but we think we should be the ones setting the bar,” Min said.

The future of home fitness with the reopening of gyms

As Covid restrictions continue to ease, people are heading back to the gym. By May, nationwide gym traffic had returned to 83% of January 2020 levels, and down just 6% from the same period in 2019, according to Jeffries research.

But does that mean Zwifters, Peloton enthusiasts, and other home athletes will lose their mojo and start using their equipment as hangers? “My theory is that if you spend a few thousand dollars to buy equipment for your home, you are very unlikely to pay $ 50 a month to go to the gym and exercise on the same machine,” said Powell.

The challenge for the home fitness industry then becomes to retain its millions of new customers. The key, Powell said, is to keep users connected to other user’s communities and “improve the experience to make people want to keep using it.”

It’s music to Strava’s ears because no matter where people train, the data can be uploaded to their platform.

Even with Strava’s success, the market for fitness tracking apps remains very competitive. MyFitnessPal, which was sold by Under Armor to private equity firm Francisco Partners for $ 345 million in October 2020, said it had more than 200 million users at the time of the transaction. Under Armor also owns MapMyRun and MapMyRide, which track running and cycling activity respectively, while footwear brand Asics owns RunKeeper. Apple and Google have their own health tracking apps that incorporate some physical fitness activities such as walking and biking that are more geared towards casual athletes.

“It’s pretty straightforward,” Horvath said of Strava’s retention strategy. “We are 100% focused on making Strava indispensable for athletes around the world. When we do it right, it fuels the growth of our community.”

“We think there are 700 million people in the world who wake up every day wanting to be active. We haven’t met them all yet, but we are trying,” he said.

Source link


Leave A Reply