Strength training start-up Tonal is attracting more venture-capital cash as investors bet that Americans will continue working out from home after the pandemic.
The San Francisco-based company announced a $110 million funding round on Thursday. Tonal executives did not disclose its new valuation, but people familiar with the deal said it remains under $1 billion. Tonal's newest high-profile investors include Amazon's Alexa Fund, Golden State Warriors' Stephen Curry, professional golfer Michelle Wie, Paul George of the Los Angeles Clippers and Bobby Wagner of the Seattle Seahawks.
The Tonal deal adds to a flurry of recent action in the at-home fitness space. On Wednesday, online fitness platform Zwift announced $450 million in funding, led by private equity giant KKR. Earlier this year, Lululemon announced it was buying Mirror for $500 million. Peloton, dubbed a "stay-at-home" stock during the pandemic, has rallied more than 200% this year as U.S. gyms remained closed. This week, Apple unveiled a new fitness platform, with a catalog of workout videos for iPhones, iPads, or on an Apple TV that sync to an Apple Watch.
Tonal's CEO Aly Orady said its Amazon backing was a "big win" for the start-up, and could eventually lead to Tonal's inclusion in a suite of connected devices through Alexa.
Orady said the new cash injection will help boost production to keep up with consumer demand. Sales have grown by 10x since the comparable period last year, according to the company.
"Even if all the gyms reopened at 100% capacity tomorrow, people aren't going to just snap back from the new habits they've built," Orady told CNBC in an interview. "Post-Covid, investors believe that workout-from-home is a permanent shift in behavior and patterns."
Tonal's workout machines can generate up to 200 pounds of resistance, using an electromagnetic resistance engine instead of classic weights. The $3,000 device looks like a flat-screen TV, with a fold-out bench and resistance bands. The system has become especially popular among professional athletes as clients.
Tonal was used by more than half of NBA teams within the Orlando bubble during the playoffs, according to the company. Steph Curry, now an investor, bought a Tonal machine at full price under a fake name, according to Orady. Months later, the Golden State Warriors point guard approached the company asking to invest, according to Orady.
Curry in a press release said he "relied on it heavily" to maintain strength training, and said Tonal is "revolutionizing how people will work out now and in the future." Tonal counts twenty pro-athletes as investors, including Serena Williams, Klay Thompson, Tony Gonzalez, Rudy Gay of the San Antonio Spurs and Kyle Rudolph of the Minnesota Vikings.