Issue No. 283: Backpedal
A proactive care plan for health, longevity, and performance.
Peloton’s future remains uncertain.
Red Flags
Last week, the connected fitness company announced a leadership change.
After two years and a failed turnaround bid, Barry McCarthy vacated the chief executive role. This news coincided with a 15% workforce reduction — the fifth since 2021.
Restructuring again as sales slow, Peloton will cut $200M in expenses by 2025.
Spin Cycle
From supposed gym killer to pandemic boom and bust, Peloton’s wild ride continues.
Act I. Premium, innovative, and cultish, founder John Foley believed Peloton was a trillion-dollar brand in the making. After an $8B IPO in 2019, lockdown-induced sales sent its stock to $50B.
Convinced COVID-era demand was the new normal, PTON put hypergrowth over fundamentals, leading to a crash and Foley’s exit.
Act II. McCarthy, a Netflix and Spotify veteran, thought content—not hardware—was Peloton’s “golden goose.”
Downplaying equipment, the company rebranded around its app, relaunched B2B sales, and reaffirmed bike rentals while offloading manufacturing.
But stalled growth ended McCarthy’s reign, sending Peloton back to the drawing board.
Act III. With $1.7B in maturing debt looming, the company must stabilize its balance sheet.
As its CEO search kicks off, Peloton’s interim execs will realign costs, reevaluate pricing, and optimize its subscriber acquisition funnel to generate free cash flow.
While greater personalization, scaling Tread sales, and a passing mention of “virtual coaching” also came up on last week’s earnings call, survival has replaced innovation on the roadmap.
Ride or Die
Rightsizing is difficult, but jumpstarting growth will be harder.
With consumers opting for IRL workouts, Peloton is moving further away from its 100M member goal — in FY24, hardware subscriptions are set to fall below 3M as app users plummet by 27%.
As the reorg unfolds, questions remain about what comes next.
Innovation. Enhancing its ecosystem to retain and attract members is a no-brainer. But, Peloton spent ~$1B on R&D from ’20–’23 with little to show. Now, slashed spending means new features, hardware, and modalities will be shelved, and improvements incremental at best.
Platform. Abandoning Foley’s vertically integrated vision, McCarthy hinted toward an open platform and potential PTON app store. Following through, Peloton OS could integrate fitness content, health data, 1:1 coaching, nutrition, and more—across brands and providers—to create the definitive wellness hub.
Acquisition. Apple, Amazon, and Nike have been linked to PTON for years. But, Apple is equipment agnostic, Amazon exited wearables, and Nike is scaling boutique studios. While the price has never been cheaper, the headache may dissuade buyers.
Roll-up. The stage is set for an Xponential Fitness of connected equipment to consolidate cycling, strength, and rowing under one banner. With investments in Tonal, iFIT, Hydrow, and a 2015 bet on Peloton, L Catterton could orchestrate a sector-wide roll-up.
Back to Reality
In hindsight, the pandemic hurt Peloton more than it helped, causing it to lose sight of its core business, community, and the opportunity to transform millions more lives.
With the right execution, it can reorient around that mission to deliver an extraordinary experience while keeping finances in check — remaining an impactful and beloved brand.
Looking ahead: One way or another, this story is nearing a resolution. Fulfilling the promise of profitable growth will fall on Peloton’s next CEO. No easy task, expectations and speculation are mounting as Wall Street, lenders, and members wait to see how it ends.
🎙 On the Podcast
Ezra founder and CEO Emi Gal discusses full-body MRIs.
A software engineer turned entrepreneur, Emi launched early cancer detection startup Ezra in 2018. Leveraging AI, the company is on a mission to make preventative MRIs the norm.
We also cover: rising cancer rates, using AI to lower costs, and Emi’s biohacking experiments.
Listen to today’s episode here.
🆕 Equinox adds health optimization membership
The premium gym chain unveiled a longevity-hacking membership tier, Optimize by Equinox.
Meet your team. For an additional $3K/mo., members gain concierge evaluations of Function Health lab tests and fitness screenings, plus entry to exclusive private gym spaces.
Executing against biannual retests, care teams keep clients dialed in with training sessions 3x a week, ongoing nutrition and sleep consultations, and massage therapy.
Equinox Rx. Leaning into healthspan, Equinox joins FITNESS SF x InsideTracker and MIORA by Life Time in pursuing the gym-as-clinic vision.
Along with Optimize, the company recently ramped up its GLP-1 training protocols, certifying coaches to support pharma-assisted weight loss.
Firing on all cylinders, Equinox landed $1.8B for expansion and notched near-record-setting revenue this spring.
Looking ahead: The new program is built for big-spending biohackers. But if other operators see gym-as-clinic as the future, riffs on Equinox’s blueprint could be a path to greater affordability.
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🧠 America’s mental healthcare is failing
The majority of US adults believe mental health problems are spreading, but treatment isn’t.
- 57% grade the US mental healthcare system a D or F.
- 38% say mental health is treated worse than physical.
When it’s accessible, most think therapy beats prescriptions — but over half cite affordability as a barrier, while 42% say finding a provider is hard.
Headway. From 2019–22, the number of adults seeking mental health services spiked ~40%. As demand outpaces supply, startups are scaling to reach those most in need.
- Specializing in serious mental illness, hybrid providers Lightfully and Amae both secured funding this year.
- Expanding teletherapy to Medicare/Medicaid patients, Brightside raised $33M in March, and Grow Therapy added $88M in April.
- Increasing in-network specialty care options, Talkspace announced new partnerships with Charlie Health, Ria Health, and Bicycle Health.
- Leveraging tech for better therapist matches, Two Chairs raised $72M last month.
Working toward a full-spectrum solution, Headspace added chat-based mental health coaching, with plans for DTC therapy later this year.
Punchline: Americans are more in tune with their mental state than ever. A double-edged sword, greater self-awareness is dissolving stigma, but mild anxieties are being pathologized — fueling outsized demand for treatment.
📰 News & Notes
- STRONG Pilates readies US HQ.
- Life Time taps lululemon as pickleball, tennis partner.
- Spotify CEO’s preventative full-body scan clinic takes London.
- REI awards $3.8M to 60 orgs improving access to the outdoors.
- WHOOP expands global sales to 56 markets, targets Gulf region.
- LMNT drops RTD electrolyte beverage. [Re-read: Hydration’s Rise]
- Digital platform FitOn adds insurance-backed nutritionist sessions.
- Health optimization platform Virtusan hires Artur Zolkiewicz as CEO.
- Apple secures FDA nod for use of AFib History feature in clinical trials.
- Saga unveils hologram-equipped exercise bike for goggle-free VR experience.
- GORUCK taps CrossFit champ Tia-Clair Toomey for exclusive workouts, apparel.
- MyNetDiary launches smart coaching algorithm to transform weight management.
- TERSA names musician Nick Littlemore Music Director for its SAVA sound therapy pod.
- Vi, an AI platform for health, is hiring strategic client service leaders for wellness/healthcare and pharma. Discover more open roles at Fitt Jobs.
💰 Money Moves
- Danish cycling apparel brand Pas Normal Studios secured an undisclosed investment from Archive Srl.
- Concierge longevity clinic Humanaut Health secured $8.7M in an oversubscribed seed round.
- Brain health bar maker MOSH raised $500K from investor Lori Greiner on Shark Tank.
More from Fitt Insider: Our Q&A with CEO Patrick Schwarzenegger - Biotech beauty brand Mother Science closed a $3.5M funding round led by Greycroft.
- DTC meat distributor ButcherBox acquired virtual culinary school Truffle Shuffle.
- Maternity care company Pacify acquired remote doula provider Major Care.
- Digital dermatology care company Piction Health announced $6M in funding.
- Mae Health, a maternal care startup for Black moms, raised an undisclosed amount in a seed round led by Jumpstart Nova.
- Musculoskeletal healthcare company Livara Health raised $15M in a Series B round led by A1 Health Ventures.
- Neurable, maker of brain wave-monitoring high-performance headphones, added $13M in a new funding round.
Today’s newsletter was brought to you by Anthony Vennare, Joe Vennare, Ryan Deer, and Jasmina Breen.