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As SoulCycle IPO Stalls, Peloton Seeks $120 Million in Funding

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Update: instructed stationary biking, also known as "spin class," is still in. While investors continue to wait on industry giant SoulCycle's proposed IPO, another emerging name in the world of spinning, Peloton Interactive, is reportedly seeking $120 million in fresh funding.

If Peloton can nab its desired cash, the company will hit a private valuation of $1.2 billion, meaning that it will have officially reached "unicorn" status. So what is Peloton, and how does it compare with the trendy-and spiritual-SoulCycle? Let's find out.

Something Else to Offer

Although it is certainly engaged in the business of guided stationary biking, Peloton is not just a SoulCycle clone. Whereas SoulCycle and competitors like Flywheel draw bikers in for the unique experience of riding in an instructor-led class at a studio, Peloton banks on the ability to sell its own bikes to people who prefer to exercise at home (also read: The Church of SoulCycle: Finding Your Soul on a Stationary Bike ).

For the not-at-all cheap price of $2,000, interested riders can own their very own Peloton stationary bike. From there, you pay $39 a month for a subscription that gives you access to 12 hours of daily live content and over 4,000 on-demand classes.

In a recent interview with Axios , Peloton CEO John Foley explained that his company is more than just another biking gym.

"[What] differentiates us is the software, which includes the streaming and the gamification and the network," said Foley. "We're also a media company on top of that, because we're streaming 12 hours of live TV content each day and have another 4,000 classes on-demand."

Foley would go on to say that Peloton has considered opening up its bike TVs to third-party content makers, even going as far as reaching out to SoulCycle and Flywheel to see if they wanted their own channel.

The Peloton chief executive also revealed some of the company's financials. According to Foley, Peloton tripled in size last year and plans to maintain the same growth rate this year. Apparently the company sold about 60,000 bikes in 2016, bringing in about $170 million in revenue. However, he declined to comment on the recent speculation regarding its desired funding.

SoulCycle IPO

As Peloton looks ready to hit unicorn status, SoulCycle is still sitting on the IPO it filed for back in 2015. At the time, the company reported 2014 revenue of $112 million, which was up nearly 50% from the year before.

In its most recent filing from December 2015, SoulCycle said that revenue grew to $99 million in the nine-month period ending Sept. 30. That was up from about $66 million in the year-before period. Regardless, a Bloomberg report from last summer cited SoulCycle CEO Melanie Whelan as saying that the company was in a "holding pattern" on the IPO.

If it eventually does IPO, SoulCycle will join Planet Fitness PLNT and Town Sports International CLUB on the short list of publicly-traded fitness facilities.

For more of Tuesday's hottest stories, check out the latest episode of Zacks' Tech Talk Tuesday podcast:

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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