Rowing start-up Hydrow secures new funding from Lizzo and Timberlake

Hydrow, the maker of a connected rowing machine, said on Tuesday it has secured nearly $ 200 million in funding after its latest round of funding with celebrity donors including Lizzo and Justin Timberlake.

Founder and CEO Bruce Smith said a portion of the funding will be used to ensure he has enough product to meet expected demand this holiday season. Hydrow’s machines sell for $ 2,295 and the company offers on-demand fitness classes, including pilates, yoga and rowing classes, for a monthly subscription.

The company did not disclose its latest valuation, but Bloomberg announced in August that Hydrow was in talks to go public through a merger with special purpose acquisition company Sandbridge X2 Corp., as part of of a deal that would value the combined entity at over $ 1 billion. .

Smith declined to comment on the report.

“It puts us in the same category as other leaders in the fitness industry,” he said. “Until now, we were maybe a little under the radar because people saw us as a small business. But we are actually very ambitious.”

Hydrow is raising new capital at a time when more consumers are returning to gyms and in-person fitness classes, forcing connected fitness manufacturers to sweat harder to find new users. There are also more in-home options than ever before, from Peloton bikes and treadmills to Lululemon’s Mirror, to Tonal, to portable boxing machines. In the meantime, it is rumored that Peloton is working on their own rowing device, which could bring even more competition to Hydrow.

According to a monthly monitoring by Wall Street research firm Jefferies, foot traffic to fitness centers has gradually returned to normalized levels over the summer, as pandemic restrictions relax. Earlier this month, Jefferies found that gym visits were back to around 90% of January 2020 levels, and down just 1% from the same period in 2019.

People return to gyms most often in Georgia, Florida and Texas, Jefferies said, while visits to New Jersey and New York lag behind the rest of the country.

Among the best players in digital fitness, Peloton retained its spot as the most visited platform in August, followed by BeachBody, added Jefferies.

“While the past year has seen an increase in digital and home fitness, we believe this medium will continue to see a decline in usage as things normalize and serve as a companion to the gym experience. traditional in the future, ”said Randal Konik, analyst at Jefferies. in a research note.

Hydrow, which offers on-demand rowing lessons, was founded in 2017 by Smith, a former coach of the United States National Rowing Team. Comedian Kevin Hart was one of the early contributors and was recently appointed Creative Director.

Last year, the company raised $ 25 million from investors, including LVMH-backed private equity firm L Catterton and Rx3 Ventures, co-founded by Green Bay Packers quarterback Aaron Rodgers.

Smith said Hydrow sales increased by more than 500% in 2020, as consumers looked for ways to train at home during the Covid pandemic. Until June of this year, sales have increased by 300% compared to the same period in 2020, he said.

Going forward, however, Smith pointed out that Hyrdow is a commercial grade product that can be added to hotel gyms, apartment complexes, and other commercial environments. This is a strategy that Peloton pursued. He announced a new platform this week for hospitality customers to purchase his products, as people start to leave their homes and Peloton looks for ways to continue to grow its member base.

“As the economy reopens, it also opens up additional sales for us,” Smith said. “And we are truly committed to being wherever our customers are.”

Hydrow is also looking to expand its presence internationally. He plans to use his latest funding to create more live and on-demand content for users, to keep them engaged.