Flywheel Sports is shutting down its at-home business, including hardware (the bike) and digital services (the streaming and on-demand classes).
How we got here: A few weeks back, Peloton and Flywheel Sports settled a legal dispute over alleged technology theft and patent infringement.
- The verdict: Flywheel acknowledged that it copied Peloton’s leaderboard technology. As part of the settlement, Flywheel agreed to pull the technology from its bikes within 60 days.
- The fallout: Flywheel’s admission of wrongdoing has proven to be the end of its at-home business — the company will stop offering virtual classes in late March.
In an email announcing the news to members, Flywheel also said “You will receive an email directly from Peloton shortly” with details about an exclusive offer. That offer, as it turned out, was the opportunity to trade in the now-defunct Flywheel At-home bike for a Peloton.
Between the lines: All signs point to some backroom dealings stemming from the Peloton vs. Flywheel litigation.
It’s no secret that Flywheel had fallen on tough times. When lenders seized control of the company in May of 2019, the outcome seemed clear: Flywheel was destined for a firesale.
While Town Sports scooped up the studios, when no buyers emerged for the at-home business, Peloton saw an opportunity. While this is speculative, it sure seems like Peloton “bought” Flywheels at-home business and an admission of wrongdoing in the patent dispute.
For its part, Flywheel admitted wrongdoing and closed up shop. Meanwhile, Peloton defended its patent and converted some former Flywheel riders.
The big picture: In the end, Peloton’s real victory is Flywheel’s admission of wrongdoing that it will surely try to leverage against other players in the connected fitness space.