The health app Strava can win within the peloton competitors with health studios
More than 400 hardware devices can connect to Strava, including fitness and fitness equipment, smartwatches and bike computers. The company says it uploaded more than 1.1 billion activities to its platform in the past year.
When this year’s Tour de France left the city of Brest on June 26th, most of the 184 professional cyclists were registered with Strava.
So do millions of recreational athletes all over the world, from runners in Rio to swimmers in Switzerland to mountaineers in Montana. There were also countless Strava users inside, on Peloton exercise bikes and treadmills, Zwift “Smart” trainers and NordicTrack rowing machines.
The Strava mobile fitness app tracks more than 30 different activities in real time and loads speed, distance, cadence and other performance data onto a platform on which 86 million users analyze their own workouts, share and compare them with other users and send them to friends Challenges can take part with friends and strangers. Its popularity soared amid the pandemic, when gyms closed and home and outdoor workouts boomed.
“We have seen tremendous growth in our community,” said Michael Horvath, Strava chief executive officer. “There were months in 2020 when we had three million new registrants and we are now at around two million a month, double what it was before Covid. This means that Strava motivates people, helps them get through this time and gives them the opportunity to get in touch with other people. “
From the Harvard series team to $ 1.5 billion startup valuation
Strava, a privately held company, was founded in 2009 in San Francisco by Horvath and Mark Gainey, former Harvard rowing teammates who now serve as CEO and Executive Chairman respectively. The company has approximately 270 employees and additional offices in Denver, Bristol, England, and Dublin, Ireland – the overseas locations as more than 80% of Strava users are outside of the United States
More than 95% of these 86 million users access Strava for free; the rest pays a $ 5 monthly subscription fee for additional features. While Strava isn’t reporting any revenue, analytics firm Sensor Tower estimates it generated $ 72 million in the past year, up from $ 60 million in 2019, ostensibly from data sales, partner rights, challenges, and subscriptions sponsor.
Strava raised $ 110 million in new funds last fall in a Series F round led by TCV and Sequoia, with the company valued at more than $ 1.5 billion. The founders said it wasn’t a profitable company yet.
Connection with all types of workouts
More than 400 hardware devices can be connected to Strava, including home fitness and fitness equipment, smartwatches and bike computers. The company said it uploaded more than 1.1 billion activities to its platform in the past year, up 33% from 2019. This is in line with the surge in fitness hardware sales from companies like Peloton.
“Covid has shown the importance of physical activity to people’s lives,” said Tom Cove, president and CEO of the Sports and Fitness Industry Association in Washington, DC, which represents manufacturers and retailers.
At the last count, Horvath said “nearly 50 million peloton activities have been uploaded to Strava,” acknowledging the synergy of his partnerships with equipment manufacturers. “As the hub of the networked fitness landscape, we offer athletes a place where they can keep in touch with their community after training.”
The continued success of fitness products seems a good harbinger for Strava.
Health and fitness equipment sales more than doubled to $ 2.3 billion from March to October last year, according to retail research firm NPD Group. Exercise bike sales nearly tripled while treadmill sales increased 135%. “For the first three months of this year, retail sales were up 30% over the same period last year,” said Matt Powell, vice president and senior industry advisor, NPD. However, sales in March remained unchanged compared to the same month last year, which he proxy for the rest of the year 2021.
Peloton has specially grown accordingly. Revenue for fiscal 2020, which ended June 30, rose nearly 100% year-over-year to $ 1.8 billion, and revenue from management projects is set to grow up to $ 4 billion in fiscal 2021 – itself when the loss of $ 165 million on his treadmill is taken into account, remember. As of March 31, the New York-based company reported more than 54 million members, each with a monthly subscription fee of either $ 12.99 for digital access to live and on-demand courses or $ 39 for an expanded range of features will pay between $ 1,895 and $ 2,345 for a Peloton bike or up to $ 4,295 for their treadmill, which is not currently available in the US as the company works on a solution to the safety issues .
Softening of the peloton demand
That demand could fade as personal workouts and gyms reopen. Wedbush Securities downgraded Peloton last week, claiming the company has seen a decline in customer loyalty based on analysis of trends in social media and internet search.
“PTON is now entering the next stage in its growth story, which in a post-pandemic era will require the company to develop its own momentum through clever marketing and compelling new products,” the Wedbush analysts write in their note.
Peloton declined to comment on this article.
Connectivity to Strava has helped advance Zwift, an online game-like cycling platform that allows subscribers who pay $ 14.99 a month to create animated avatars of themselves riding from inside in the virtual realm. Typically, a real cyclist attaches the back end of his racing bike to a digitally controlled smart trainer that is connected to an app that simulates his avatar driving an actual route – from a local favorite to a mountain stage in the tour – seen on a monitor, tablet or smartphone. The trainer automatically increases and decreases resistance to mimic the altitude of the route. About 75% of the Zwifters upload their driving data to Strava and integrate them into the functions.
My theory is that if you are spending a few thousand dollars buying a piece of equipment for your home, it is very unlikely that you will pay $ 50 a month to go to the gym and work out on the same piece of equipment.
Matt Powell, Vice President and Senior Industry Advisor for NPD
Since Zwift was founded in Long Beach, California in 2014, 3.5 million accounts have been created. The company didn’t release the current number, but said the number doubled in FY 2021, which ended in March. Strava said it uploaded 100 million Zwift activities to its platform, including thousands of grueling “Everstings,” a single virtual ride that climbed at least 29,029 feet in total, the height of the mountain. Everest. During the worldwide Covid bans last year, Zwift held a virtual Tour de France with classifications for men and women.
“Zwift is a platform for people to hunt any carrot they are looking for,” said Co-Founder and CEO Eric Min. “We aim to motivate people to do more.”
While subscriptions “really are where the value lies to us as a company,” Min said, the company is developing its own smart trainers and indoor bikes that are likely to hit the market next year. Zwift won’t be ruling out its existing hardware partners like Wahoo, Elite and Tacx, “but we think we should be the ones who set the bar,” said Min.
The future of home fitness after the reopening of gyms
As Covid restrictions continue to relax, people are returning to the gym. In May, gym traffic across the country was back to 83% from January 2020 levels and only 6% from the same period in 2019, according to research by Jeffries.
But does that mean Zwifters, peloton fans, and other exercise bikes are losing their mojo and using their equipment as coat hangers? “My theory is that if you spend a few thousand dollars buying a piece of equipment for your home, it’s very unlikely that you would pay $ 50 a month to go to the gym and work out on the same piece of equipment.” said Powell.
The challenge for the home fitness industry then is to retain its millions of new customers. The key, Powell said, is keeping users connected to the fellow exercisers’ communities and “improving the experience so people will want to keep using it”.
This is music to Strava’s ears because no matter where people train, the data can be uploaded to their platform.
Despite Strava’s success, the fitness tracking app marketplace remains highly competitive. MyFitnessPal, which was sold by Under Armor to private equity firm Francisco Partners for $ 345 million in October 2020, had more than 200 million users at the time of the transaction. Under Armor also owns MapMyRun and MapMyRide, which record running and cycling, respectively, while shoe brand Asics owns RunKeeper. Apple and Google have their own health tracking apps that include some physical fitness activities like walking and cycling that are more geared towards casual athletes.
“It’s pretty simple,” Horvath said of Strava’s retention strategy. “We are 100% focused on making Strava essential for athletes everywhere. If we do this well, it will fuel our community growth. “
“We believe that there are 700 million people in the world who want to wake up and be active every day. We haven’t met them all yet, but we’re trying, ”he said.