Venture Capital: Indoor Fitness App Maker Zwift Snags $450M

September 17, 2020 | News, Venture Capital
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KKR led the monster funding round.

Zwift, which blends serious indoor workouts with the fun of virtual events and video games on its online “connected-fitness” platform for runners and cyclists, raised a humongous $450 million. In an announcement Thursday, the startup announced that KKR led the funding which was supported by new investors such as Permira, Specialized Bicycle Components’ venture capital fund, Zone 5 Ventures and the Amazon Alexa Fund. Existing investors including True, Highland Europe, Novator and Causeway Media also participated. (CISION PR Newswire)

Zwift – how it works

By wirelessly pairing their bike trainer or treadmill to the Zwift app, a user can sync with their own in-game, virtual avatars. Zwift uses gaming technology and 3D computer-generated images and videos, to create 240 miles of terrain in 10 virtual worlds.

The user can therefore convert a humdrum, at-home workout into an immersive and fun experience. It’s also a social platform, because the user can connect with friends, take group rides and take part in mass events.

One very apt description of the platform, according to Outside magazine, is:  “part social-media platform, part personal trainer, part computer game.”

Funding and its use

According to Crunchbase data, Zwift has raised a total of $614.5 million till date from 15 investors after its founding in 2015. The platform now boasts of over 2.5 million accounts registered across 190 countries.

It now commands a dominant position in the at-home connected fitness market. That was proved by its selection as the host for the first Virtual Tour de France in July, an event broadcast to over 130 countries worldwide with the world’s best male and female professional cyclists competing.

Zwift will use the new financing to further develop its core platform. It also intends to launch in-house designed training hardware in due course.

“Zwift is the preeminent digital brand for the global cycling community with a best-in-class product that sits at the intersection of digital health, gaming and at-home fitness,” said Stephen Shanley, Director at KKR. “We see tremendous potential ahead as Zwift invests further in its digital and physical products to enhance the experience for its global community of enthusiastic users.”

Competition from Apple

Zwift already has meaningful competition from Peloton (NASDAQ: PTON), which has had a dream run since listing, having tripled since then.

Meanwhile, Apple (NASDAQ: AAPL) announced Tuesday its Fitness+, the first fitness experience built for Apple Watch, arriving later this year.

The company promises studio-style workouts delivered by inspiring world-class trainers and underscored by motivating music from renowned artists.

Related Story:   The DailyAlts Playbook: A Peloton Purchase

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