Peloton Rival Equinox Snags Funding From Silver Lake

Luxury gym operator Equinox has secured funding from Silver Lake, an equity firm, in its continuing bid to compete with exercise giant Peloton, according to a report by Bloomberg. Terms of the funding were not disclosed.

Equinox, a majority stake owner in SoulCycle, is going to use the funding to expand its digital platform, as well as add about 50 new locations a year. Equinox already has around 100 locations throughout North America and the U.K., and it wants to move into the Middle East in the near future.

The real game changer is a plan to introduce a SoulCycle bike that’s made for use at home, which will be a direct challenge to Peloton’s own home exercise bike.

Peloton’s shares fell 4.9 percent to $27.57 on the news, and that follows a dip of 11 percent a day before, after the company shared its sales projections, which didn’t meet expectations.

“At Peloton, we believe we can achieve both growth and profitability over time,” Peloton Chief Financial Officer Jill Woodworth said earlier this week following the company’s earnings report.

The majority of Peloton’s products are sold in America, but it recently made forays into Canada and the U.K. as well. In November, the company moved into Germany.

“We saw Member engagement continue to grow in the second quarter with 12.6 Average Monthly Workouts per Connected Fitness Subscriber, versus 9.7 Workouts in the same period last year. Our Connected Fitness Subscribers worked out with us 24.3 million times, up from 9.3 million workouts in the same period last year, representing 161 percent year-over-year growth. We ended the quarter with 109,198 Digital Subscribers, up 77 percent year-over-year,” Peloton said in a shareholder letter.

Equinox said the funding from Silver Lake would help it to reach new levels.

“As we accelerate our expansion while delivering a first-of-its-kind online/offline experience for our growing global community, Silver Lake is providing valuable expertise as well as capital to fuel this next stage of growth,” said Harvey Spevak, Equinox executive chairman.

Equinox has celebrities like Hilary Swank and Andy Cohen as members, as well as Morgan Stanley Chief Executive Officer James Gorman.