IFIT IPO: Everything you need to know about IFIT

Fitness technology company IFIT is hot on the heels of rival Peloton and will eventually debut on Nasdaq when the market conditions are right. Here’s the lowdown on the company in advance of the IFIT IPO.

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IFIT IPO: What do we know about the IFIT IPO?

In September 2021, IFIT announced its plans to IPO on Nasdaq, aiming to raise some $646 million with a pricing of $18-$20 a share. The transaction would have meant a valuation of around $6.6 billion, but in October the company postponed the listing, citing unfavourable market conditions. Subsequently, the date for the flotation is unclear.

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How to trade IFIT

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How much is IFIT worth?

IFIT was aiming for a valuation of $6.6 billion for its IPO before the postponement. It is unclear how much the company is worth leading up to the transaction, due to the lack of public data on the exact ownership structure prior to the listing.

What is IFIT?

IFIT is a Utah-based fitness technology company that makes products ranging from treadmills to exercise bikes and ellipticals, and runs an integrated health and fitness platform. It owns brands such as NordicTrack, Freemotion and ProForm, through which it sells its goods and provides a range of subscription-based workout programs.

The company’s origins go back to 1977 when university students Scott Watterson and Gary Stevenson teamed up to provide home fitness solutions involving VHS players, taped workouts and inclined treadmills. After a period of growth leading to the sale of their majority stakes, a further chunk of the company was sold to private equity house Bain Capital for $370 million in 1994.

Following the acquisition of NordicTrack in 1999 and Freemotion in 2000, the company grew to be a foremost player in the industry, but 2012 saw the founding of rival Peloton, which quickly snatched the number one spot in the market.

In 2015, Watterson purchased his stake back from Bain Capital, and 2019 saw IFIT raise $200 million, in a round led by Pamplona Capital Management, to take on Peloton and accelerate IFIT’s interactive fitness platform in the home and club fitness industries. At the time, IFIT had amassed 330,000 paid memberships, but would grow this figure to more than 1.5 million as of October 2021.

The company achieved revenues of some $1.74 billion for 2021, more than double the $851 million for the year prior. The company employs more than 2,500 people worldwide as of October 2021.

Who are IFIT’s competitors?

IFIT’s highest profile competitor in the fitness industry is Peloton, which has grown to a market cap of $26 billion since its popularity exploded during the Covid pandemic. In terms of paid subscribers, Peloton’s 3 million as of July 2021 outshines the 1.5 million IFIT has claimed in its SEC filing, and Peloton’s revenue is also roughly double that of IFIT’s.

Aside from Peloton though, there is a growing number of rivals eager to capitalise on a fitness industry projected to be worth $59 billion by 2027. Such players include home gym start-ups Tonal, which raised $250 million in March 2021 at a valuation of $1.6 billion, and Tempo, which attracted $220 million in April 2021.

How does IFIT make money?

IFIT makes money through the sale of its fitness equipment, such as its NordicTrack S15i and S22i bikes, which are priced at $1,599 and $1,999 respectively.

The company also makes money through subscription fees for its interactive workout programs. The individual membership package costs $15 a month and gives the user digital access to ‘world-class coaching from start to finish in destination locations like Australia, Italy, Bora Bora, Antarctica, and more’. The family package at $39 a month allows people to add up to four secondary users to the account.

What is IFIT's business strategy?

IFIT’s business strategy is centred around providing cutting-edge products based on proprietary technology, along with leading interactive workout experiences, in order to best suit the needs of modern fitness enthusiasts. The company’s ambition is to create ‘the world’s most holistic health and fitness platform’.

To get there, IFIT has had to contend with the explosion of Peloton and the popularity of its touchscreen-fitted indoor bike. Armed with its recent investment of $200 million and holding more than 400 patents, IFIT has launched a series of products of late such as the NordicTrackVault, incorporating an interactive smart mirror for workout routines.

It has also moved into the mindfulness space with its IFIT Mind offering, and broadened its library of workout routines to 15,000 classes through a partnership with gym franchisor Planet Fitness, which now holds a stake.

The company has also made some notable acquisitions, including the July 2021 purchases of women’s fitness app Sweat and endurance hiking events creator 29029. 

Moving forward, the company’s goal is to grow its recurring subscriber base globally through the sale of its digital services and interactive products. Market speculators interested in the IPO will be keen to see how scaling the userbase and launching new hardware offerings will translate to overall profitability, something that has thus far eluded the business.

Is IFIT profitable?

IFIT is not currently profitable, as its F-1 form shows a loss of $516 million for the latest financial year on revenues of $1.7 billion, compared to a loss of $98 million the prior year. This loss is down to the company’s substantial investment in sales and marketing, which has eclipsed the spend of previous years. Those interested in the company’s IPO will be keen to see evidence of this profile boost translating to net profit growth in the coming year.

Who owns IFIT?

IFIT is owned in part by founder Watterson, with other organisations holding stakes including  Pamplona Capital Management and Planet Fitness. 

Key personnel of IFIT

Scott Watterson– Co-founder, Chief Executive Officer

Steve Barr – Chief Financial Officer

Chase Brammer – Chief Technology Officer

Chase Watterson – Chief Marketing Officer

Kathryn Freytag – Chief Information Officer

 

 

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