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The Peloton effect

How much more connected fitness VC activity are we seeing in 2020?

During the most recent quarter, only a few earnings reports stood out from the rest. Zoom’s set of results were one of them, with the video-communications company showing enormous acceleration as the world replaced in-person contact with remote chat.

Another was Peloton’s earnings from the fourth quarter of its fiscal 2020, which it reported September 10th. The company’s revenue and profitability spiked as folks stuck at home turned to the connected fitness company’s wares.


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Shares of Peloton have rallied around 4x since March, roughly the start of when the COVID-19 pandemic began to impact life in the United States, driving demand for the company’s at-home workout equipment. In late June, the leisure company Lululemon bought Mirror, another connected fitness company aimed at the home market for around $500 million.

With Peloton’s 2019 IPO and its growth along with Mirror’s exit in 2020, connected fitness is demonstrably hot, and private-market investors are taking notice. A recent Tweet from fitness tech watcher Joe Vennare detailing a host of recent funding rounds raised by “digital fitness” companies made the point last week, piquing our curiosity at the same time.

Is there really some sort of Peloton effect driving private investment into lots of connected fitness startups? How hot is the more nascent side of connected fitness?

This morning let’s take a look through some recent funding rounds in the space to get a feel for what’s going on. (If you’re a VC who cares about the sector, feel free to email in your own notes, subject line “connected fitness” please.) We’ll then execute the same search for Q3 2019 and see how the data compares.

Hot Wheels

To start with the current market I pulled a Crunchbase query for all Q3 funding rounds for companies tagged as “fitness” and then filtered out the cruft to get a look at the most pertinent funding events.

Here’s what I came up for for Q3 2020, to date:

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Daily Crunch: Lululemon is acquiring Mirror

Lululemon is paying $500 million to acquire a home fitness startup, India bans TikTok and Amazon Prime Video is the latest streaming service to add a co-viewing experience.

Here’s your Daily Crunch for June 30, 2020.

1. Lululemon set to acquire home fitness startup Mirror for $500M

The deal comes at a time when home workout solutions are in high demand thanks to the COVID-19 pandemic. Even when gyms begin to reopen in different locales, many will likely be wary of returning to a potentially high-risk enclosed space, at least for as long as the virus continues to spread.

Although there’s stiff competition in the category of connected fitness slabs, including Tonal and Tempo, Mirror continues to be the biggest name of the bunch. And the two companies have a relationship dating back to late last year, when Lululemon become an investor in Mirror.

2. TikTok goes down in India, its biggest overseas market

A growing number of internet service providers in India have started to block their subscribers from accessing TikTok a day after the Indian government banned the popular short-video app and 58 other services over security and privacy concerns.

3. Amazon Prime Video introduces ‘Watch Party,’ a social co-viewing experience included with Prime

Amazon is the latest streaming service to roll out built-in support for co-viewing. While the U.S. was sheltering in place under coronavirus lockdowns, a browser extension called Netflix Party went viral. So HBO partnered with the browser extension maker Scener to offer a “virtual theater” experience for co-watching, while Hulu launched its own native Watch Party feature for its “No Ads” subscribers on Hulu.com.

4. After losing Grubhub, Uber reportedly hails Postmates

Uber has reportedly made an offer to buy food delivery service Postmates, according to The New York Times. (The talks are still ongoing and the deal could fall through.)

5. 13 Boston-focused venture capitalists talk green shoots and startup recovery

This is the second half of our Boston investor survey. Looking to the future, we asked: Are investors seeing green shoots? When is a recovery likely to begin? What’s making them feel hopeful in this tenuous era? (Extra Crunch membership required.)

6. Facebook says it will prioritize original reporting and ‘transparent authorship’ in the News Feed

The change comes as a number of high-profile companies have said that they will pull their advertising from Facebook as part of the #StopHateforProfit campaign, organized by civil rights groups as a way to pressure the social network to take stronger steps against hate speech and misinformation.

7. In a significant expansion, Spotify to launch real-time lyrics in 26 markets

Last November, Spotify confirmed it was testing real-time lyrics synced to music in select markets. Today, the company is announcing the launch of its new lyrics feature in 26 worldwide markets across Southeast Asia, India and Latin America.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

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