Peloton, the private growth unicorn last valued at over $4 billion, has made its registration documents public. The company, founded in 2012, has ridden the tailwinds of consumer interest in health-oriented products and has adopted a subscription-based business model currently favored by investors. In the S-1, Peloton refers to a 2018 report by the Global Wellness Institute, which pegs their market opportunity at $600 billion. Will this coupling cause further investor curiosity?
Peloton sells both the equipment and the programs that motivate users to exercise and has found a degree of success in doing so. In our first pass at Peloton’s registration documents, we observed revenue growing at a 317 percent clip and subscribers increasing 373 percent from 2017 to 2019. In the more recent fiscal year, revenue growth outpaced subscriber growth. The company claims 92 percent of its sold subscriptions remain active.
Private investors have taken notice and prior to the dual class listing many of them garnered significant positions in Peloton. Tiger Global amassed the largest single position with nearly 20 percent of the voting power, followed by True Ventures, Fidelity, and TCV with 12 percent, 6.8 percent, and 6.7 percent, respectively. These positions as of the last primary funding in August 2018 were valued at $675 million, $410 million, $230 million, and $227 million respectively. These investors may be locked up for 6 months after the company’s forthcoming IPO. Public markets have shown a healthy appetite for high growth companies so far in 2019; will Peloton ride its way to a strong public showing or will it run out of breath before completing the course?
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