Cycling Startup Peloton Confidentially Files for U.S. IPO

(Bloomberg) -- Peloton Interactive Inc. has filed confidentially for an initial public offering, the latest in a string of technology companies seeking to join the public markets in 2019.

The home-exercise startup has submitted its draft listing documents to the U.S. Securities & Exchange Commission, New York-based Peloton said in a statement Wednesday. The company is working with Goldman Sachs Group Inc. and JPMorgan Chase & Co. to lead its listing, which could value the company at more than $8 billion, people familiar with the matter said in February. Peloton said Wednesday that the number of shares to be offered and the price range haven’t yet been determined.

Technology companies have raised more than $15 billion on U.S. exchanges this year, according to data compiled by Bloomberg, with Uber Technologies Inc.’s $8.1 billion offering topping the list of startups tapping public market investors after years of private ownership. Performances have been mixed, with Uber and ride-sharing rival Lyft Inc. both trading below their IPO prices, while shares in both Pinterest Inc. and Zoom Video Communications Inc. have jumped.

New York-based Peloton was founded in 2012, pitching an at-home spin bike for a hefty price tag of about $2,000, plus a monthly subscription of $40. When it first launched, investors often scoffed at the firm’s prospects, seeing it purely as a fitness-equipment maker and citing the high price of the product as a potential hurdle to growth.

Digital Subscriptions

Co-Founder and Chief Executive Officer John Foley has long argued that Peloton isn’t a hardware company, but a media company, with the bulk of its revenue coming from the monthly fee. As well as its at-home bicycle, treadmill and in-studio classes, Peloton sells a digital video subscription service for $19.49 a month that also streams yoga, meditation and bootcamp classes.

“We say we are platform agnostic with our content,” Foley said in an interview with Bloomberg in May. “Wherever you want to consume Peloton fitness,” he added, “we’re there for you.” Foley said at the time the firm has close to 500,000 subscribers.

Rather than compete with companies like SoulCycle, which made a name for itself building out studio locations where a single class costs more than $30, Peloton has one cycling studio where it films its content and members can attend live classes. SoulCycle submitted paperwork for an initial public offering in 2015, only to withdraw it three years later.

Some of Peloton’s early backers include Tiger Global and Uber CEO Dara Khosrowshahi. It raised $550 million in a funding round last year led by venture capital firm TCV that valued that company at $4.15 billion.

Along with Peloton, the second half of 2019 is likely to herald several more multibillion-dollar tech listings, including WeWork Cos. and food-delivery pioneer Postmates Inc. Slack Technologies Inc. is taking its own route to go public on June 20, choosing a direct listing rather than a traditional IPO.

To contact the reporters on this story: Elizabeth Fournier in New York at efournier5@bloomberg.net;Julie Verhage in New York at jverhage2@bloomberg.net

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Ben Scent, Molly Schuetz

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