SoftBank Leads $220 Million Funding for AI Home Gym Maker Tempo
(Bloomberg) -- SoftBank Group Corp.’s Vision Fund 2 led a $220 million funding round for Tempo Interactive Inc., maker of an artificial intelligence-powered home gym system, betting that the Covid-19 pandemic has permanently changed the appeal of domestic exercise.
Tempo’s proposition is built around a $2,495 exercise studio that includes a 42-inch touchscreen display, 3D sensors to detect the user’s movements and stereo speakers for coaching encouragements and guidance. Its $39-per-month membership to access live training classes requires a minimum of a year’s commitment.
“We’ve had zero subscription cancellations and grown sales 10 times in the past year which is a validation of our product -- a personal trainer in the home for the whole family,” founder and Chief Executive Officer Moawia Eldeeb said in an interview. The fresh capital will be invested in enhancing Tempo’s AI and motion-tracking technology used to provide real-time feedback.
Steadfast Capital, General Catalyst, Norwest Venture Partners, DCM and Bling Capital also participated in the latest round. Tempo’s valuation has more than tripled from the $250 million the San Francisco-based company was ascribed when it last raised capital in 2020, though Eldeeb declined to provide a specific figure.
The company plans to have its product available for testing at various Best Buy Co. and B8ta stores this year. It has expanded its range of hardware with a new kettlebell set and a folding squat rack, with its full equipment suite costing $3,995. Eldeeb stressed the goal of delivering a product at a more affordable price point “as fast as possible” without compromising key features.
At-home fitness will continue to exist alongside other in-person and social workouts post-pandemic, SoftBank Vision Fund managing partner Jeffrey Housenbold said. Citing a recent Consumer Trends survey in the U.S. that found 81% of people under 40 and 66% overall preferred to exercise at home, he added that SoftBank’s own research found roughly 60% of people are keen to engage in weight training.
“SoftBank has strong relationships in Asia and we’re helping Moawia with approaches to lower the cost of manufacturing and exploring strategic ways to bring Tempo to the masses at a lower price point,” Housenbold said. Though he’s leaving the investment behemoth in the coming months, Housenbold said he’ll remain a board member of certain portfolio companies -- including Tempo -- as well as an adviser to SoftBank founder Masayoshi Son.
Tempo’s funding round comes amid a continued surge of investment in at-home fitness companies. Wall-mounted workout station maker Tonal was recently valued at $1.6 billion; Goldman Sachs Group Inc.’s merchant banking arm backed Echelon Fitness and KKR & Co. invested in virtual-cycling specialist Zwift.
Housenbold, who twice passed on investing in category leader Peloton Interactive Inc., said that venture capital presents plenty of opportunities and “if you were wrong yesterday, you can be right tomorrow.”
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