John Foley, CEO of Peloton.
Adam Jeffery | CNBC
Peloton, the company that brings spinning lessons into your living room, has turned the combination of fitness and connected devices into a business big enough for public markets.
In its IPO Prospectus published Tuesday, the manufacturer of stationary home bicycles and treadmills grew more than 100% last year, due to the "growing awareness of the benefits of exercise and physical activity". The company said the fitness industry has grown in the US and abroad over the last two decades, even in times of recession.
Peloton, however, suffers from the same shortage that plagues other digital health products and services such as activity trackers (staff) training apps and fitness classes. It does not really move the needle when it comes to the health of the country.
More than one in three Americans is considered obese, which costs the congested healthcare system at least $ 1
The peloton bike costs more than $ 2,200 for the simplest package, but does not include the monthly tuition fee. For millions of Americans who live from paycheck to paycheck, that's far out of reach. In order for the company to have a real impact on the health crisis, it not only has to reach city dwellers who love convenience, but also the populations most in need of user-friendly fitness services.
Peloton isn & # 39; t try to fool someone about his target audience. The company was mocked earlier this year in a viral tweet thread that made fun of its ads, which clearly target the rich.
Robin Arzón, Vice President of Fitness Programming at Peloton
"These models are expensive and exclude many people," said Iyah Romm, CEO of Cityblock Health, an urban health initiative focused on low-income communities. "And it raises the question of whether it is even for different population groups in question."
Peloton has more than 500,000 customers using its paid subscription service, just over 245.00 a year ago. Revenues increased to $ 915 million for the twelve months ended June 30, compared to $ 435 million a year ago.
"We believe that a busy lifestyle, less free time, and changing household dynamics drive demand," Peloton said in the file.
Low-income people also fit in with these categories but can not afford the services. And Peloton, which is already losing money, needs to put even more emphasis on profit margins to attract public market investors.
"We have inadvertently created a society in which it is difficult to be healthy," said Steve Downe, Chief Technology and Strategy Officer of the Robert Wood Johnson Foundation. "So many of the solutions are not available to most people."
WATCH: peloton files for the IPO under the acronym PTON