Tonal Sees Valuation Cut in New Funding Round


The smart gym maker raised $130M from existing investors, including L Catterton.

But… burning cash amid slowing demand, the down round trimmed the company’s valuation from upwards of $1.9B to ~$600M.

Shaking up the C-suite, founder Aly Orady is stepping down as CEO. Tonal president Krystal Zell is taking over the top spot, while Orady will stay on as CTO.

Hard gains. As we detailed in Issue No. 221, connected fitness companies are facing headwinds in a post-pandemic world.

  • Attempting a turnaround, Peloton’s market cap has fallen to $4B from $50B in 2021.
  • After canceling its IPO, NordicTrack parent iFIT had its valuation cut by 60% in a 2022 funding round.
  • lululemon is “pivoting away” from hardware after spending $500M to acquire workout screen maker MIRROR.

For its part, despite raising $615M to date, a series of operational miscues have stifled Tonal’s progress.

Now, like the rest of the smart equipment category, Tonal will have to shift from a growth-at-all-costs mentality to a disciplined pursuit of profitability.

TBD. Complicating matters, some of tech’s biggest names are undergoing layoffs of their own, meaning the list of would-be acquirers for companies like Tonal is shrinking.

Punchline: Easier said than done, having secured a lifeline with the latest traunch of capital, the company’s future now hinges on its ability to execute efficiently.

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