Strava fitness app could win in Peloton contest with Jim

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Strava can be connected to over 400 hardware devices, including home fitness and gym equipment, smartwatches and bike computers. According to the company, more than 1.1 billion activities were uploaded to the platform last year.

Strava

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

The same is true for millions of amateur athletes around the world, from runners in Rio to Swiss swimmers to mountaineers in Montana. Inside was an army of Strava users on Peloton exercise bikes and treadmills, Zwift “smart” trainers and Nordic Track rowers.

The Strava mobile fitness app tracks over 30 different activities in real time and uploads speed, distance, cadence, and other performance data to the platform. The platform allows 86 million users to analyze their training, share it and compare it with others, and take on user-friendly challenges. With friends and strangers. As the gym closed and exercise at home and outside increased exponentially, its popularity skyrocketed during the pandemic.

Michael Horvath, CEO of Strava, said: “In 2020 there was a month with 3 million new enrollees, but now it’s around 2 million per month, twice as many as before Covid. This is what Strava motivates people. Overcome this period and connect with others. “

Harvard column teams at $ 1.5 billion in startup notes

Strava, a private sector, was started in San Francisco in 2009 by former Harvard teammates in the rowing team and now CEO and executive chairman Horvath and Mark Gainey, respectively. The company has approximately 270 employees and additional offices in Denver, Bristol, England and Dublin, Ireland. In fact, over 80% of Strava users are located outside of the United States, so we are based overseas.

Over 95% of our 86 million users have free access to Strava. Others pay a monthly subscription of $ 5 for additional features. Strava did not report any revenue, but analytics firm Sensor Tower made $ 60 million in 2019 and $ 72 million last year from its partner rights to sell data, dispute, and s ‘subscribe. I guess it was.

Strava raised $ 110 million in new funding in a Series F funding round led by TCV and Sequoia, valuing the company at more than $ 1.5 billion. The founders say they are not yet a profitable business.

Connect to all kinds of training

Connect over 400 hardware devices to Strava, including home fitness equipment, gym equipment, smart watches, and bike computers. The company said last year that activity uploaded to the platform exceeded 1.1 billion, a 33% increase from 2019. This matches the significant increase in sales of fitness equipment from companies such as Peloton.

“Thanks to Covid, we have made a big difference in the importance of physical activity in people’s lives,” said Tom Cove, president and CEO of the Washington, DC Sports and Fitness Industry Association, who represents manufacturers and retailers. ..

Finally, Horvath acknowledged the synergies of the partnership with the OEM, stating that “nearly 50 million Peloton activities have been uploaded to Strava”. “As the hub of a connected fitness landscape, it offers athletes a place to stay connected to the community after training. “

The continued success of fitness products seems to bode well for Strava.

Revenues from health and fitness equipment more than doubled to $ 2.3 billion between March and October of last year, according to retail research firm The NPD Group. Sales of exercise bikes almost tripled and sales of treadmills increased 135%. Matt Powell, vice president and senior industry advisor at NPD, said: However, March sales have remained stable from the month he predicted a year ago for the remainder of 2021.

Peloton grew particularly proportionately. Revenue for fiscal 2020, which ended June 30, increased nearly 100% year-on-year to $ 1.8 billion, and revenue from managed projects for 2021 rose further to $ 4 billion. That takes into account the loss of $ 165 million Peloton expects from a treadmill. Memory. As of March 31, the New York-based company had more than 54 million members, each with $ 12.99 for digital access to live and on-demand courses, or $ 39 for an extended suite of features. Pay the monthly subscription fee for. You’ll pay between $ 1,895 and $ 2,345 for your Peloton bike, or up to $ 4,295 for your treadmill. It is currently not available in the United States as the company is working to resolve a security issue.

Softening of the demand for protons

Demand could ease as face-to-face workouts and gyms resume. Wedbush Securities demoted Peloton last week, saying it saw a drop in client engagement, based on an analysis of social media trends and internet research.

“PTON is now entering the next phase of its growth story. In the post-pandemic era, the business must build its own momentum through savvy marketing and compelling new products, ”said Wedbush. Analysts wrote in a note.

Peloton declined to comment for this article.

Logging in to Strava helped promote Zwift, a game-like online cycling platform that allows subscribers who pay $ 14.99 per month to create their own animated avatars by riding virtual zones from indoors. . A true cyclist usually connects the back of a road bike to a smart, digitally controlled trainer. This app is linked to an app that simulates an avatar on a real route, from local favorites to the mountain stages of the tour. Monitor, tablet or smartphone. The indoor trainer automatically increases or decreases the resistance to mimic the altitude of the route. About 75% of Zwifters upload trip data to Strava and connect it to this feature.

My theory is that if you spend thousands of dollars to buy equipment for the home, you rarely pay $ 50 a month to go to the gym and work out on the same machine.

Matt Powell, Vice President and Senior Industry Advisor, NPD

Since Zwift’s inception in 2014 in Long Beach, California, 3.5 million accounts have been created. The company did not provide current figures, but said it doubled in 2021 and ended in March. Strava said 100 million Zwift activities have been uploaded to the platform. This includes thousands of challenging “Everstings,” a single virtual ride that climbs a total of 29,029 feet of mountain height. Everest. During last year’s global Covid blockade, Zwift hosted a virtual Tour de France ranked both male and female.

“Zwift is a platform to hunt the carrots that people are looking for,” said co-founder and CEO Eric Min. “Our goal is to motivate people more. “

The subscription “is definitely worth it,” Min said, but the company is developing its own smart trainers and indoor bikes which are expected to hit the market next year. Zwift doesn’t rule out existing hardware partners like Wahoo, Elite, and Tacx, but “we think we should be setting the standard,” Min said. I am.

The future of home fitness where the gym takes over

People are returning to the gym as Covid restrictions continue to be relaxed. In May, Jim’s traffic across the country fell to 83% of January 2020 levels, down just 6% from the same period in 2019, according to a Jeffreys poll.

But does that mean that Zwifters, Peloton enthusiasts, and other home athletes are losing Mojo and starting to use the device as a hanger? “In my theory, if you spend thousands of dollars to buy equipment for the home, you rarely pay $ 50 a month to go to the gym and work out on the same machine,” Powell said. I am.

The challenge for the home fitness industry is to retain millions of new customers. According to Powell, it’s important to keep users connected to other user’s community and “improve the experience so that users want to keep using it.”

This is music that Strava can hear. Because no matter where people are exercising, the data can be uploaded to this platform.

Even with the success of Strava, the market for fitness tracking apps is still very competitive. MyFitnessPal, which was sold by Under Armor to private equity firm Francisco Partners in October 2020 for $ 345 million, said it had more than 200 million users at the time of the transaction. Under Armor also owns Map My Run and Map My Ride, which track running and cycling activities, respectively. Footwear brand Asics owns RunKeeper. Apple and Google have their own health tracking apps that integrate fitness activities for casual athletes, like walking and cycling.

“It’s very easy,” Horvath said of Strava’s retention strategy. “We are 100% focused on making Strava an integral part of athletes around the world. If it works, it will stimulate the growth of the community.

“I think 700 million people around the world want to wake up and work every day. I haven’t seen them all yet, but I’m working hard, ”he said.

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