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Peloton Interactive is a New York City-based company that develops exercise bikes, treadmills, and rowing machines capable of streaming indoor fitness classes. The company was founded in 2012 by Graham Stanton, Hisao Kushi, John Foley, Tom Cortese, and Yony Feng. Peloton's fitness equipment comes with a subscription-based software platform that allows users to stream live or pre-recorded fitness classes while using their exercise equipment. The company also offers subscriptions to exercise classes through Peloton's iOS and Android apps.
Peloton got its start in 2012, when Foley, then an e-commerce executive at Barnes & Noble, had the idea to bring the experience of instructor-led exercise classes into people's homes. Foley, who served as Peloton's CEO at the time, assembled a team that included founders Cortese, Feng, Kushi, and Stanton and closed a $3.5 million Series A later that year. Peloton used this funding to build a prototype of their flagship product, a stationary bike mounted with a television screen capable of streaming exercise classes. The company used the prototype to launch a Kickstarter campaign in 2013, from which they raised $307,000.
Peloton continued to close funding rounds while investing in the development of their exercise bikes, closing a $10.5 million Series B and a $30 million Series C in 2014 and 2015, respectively. Growing demand for the exercise bikes enabled Peloton to continue growing. By 2018, the company had raised another $550 million in financing and was valued at $4 billion.
Peloton's bikes saw an even greater spike in popularity in early 2020, during the Covid-19 pandemic. Due to shelter-in-place orders and the closing of gyms, many patrons began panic-buying Peloton's bikes. Revenue rose 66 percent from the previous year, and more than one million new users had signed up for exercise classes. Peloton aggressively ramped up production to meet the newfound demand and avoid supply-chain issues.
The years after the pandemic proved to be much more difficult for the company. In 2021, as gyms and other exercise studios began reopening, Peloton saw a decrease in popularity as people began to be active outside of their homes once again. Used Peloton bikes began to show up on resale sites like Craigslist and Facebook Marketplace. In 2022, Peloton lost $439 million in value and laid off twenty percent of its workforce as a result of this decline in popularity. That same year, Foley and Kushi, who had served as Peloton's CEO and chief legal officer, respectively, announced their resignations. Peloton hit another snag in May 2023, when it announced that it would be recalling over 2 million exercise bikes due to faulty seat posts breaking. The recall caused Peloton's shares to slide more than nine percent.
