Tonal, the at-home fitness company backed by Amazon, hits $1.6 billion valuation on new funding round, readies for IPO

The at-home fitness start-up Tonal said Wednesday it has raised an additional $250 million in funding, valuing the business at $1.6 billion.

That brings Tonal’s total funding to $450 million. Participants in the Series E round include the investment firm Dragoneer, which led the round, along with Cobalt Capital, L Catterton and Sapphire Ventures.

The company said it plans to use the fresh capital to accelerate its marketing efforts, to open more brick-and-mortar stores, and to invest in logistics and manufacturing to meet what it says is unprecedented demand. The funding also brings Tonal one step closer to an initial public offering, according to its CEO, who declined to offer a firm timeline on when that might take place.

“The first piece of this is really scaling the business and being able to capture all the demand that we have, and preparing the company for an IPO,” Chief Executive Officer Aly Orady said. “There’s still a lot of growth ahead of us, and that’s going to require us to deploy money into different marketing channels, including of course retail.”

Tonal said its 2020 sales grew more than eight-times year over year, as customers looked for ways to build better workout routines at home during the Covid pandemic.

Tonal’s wall-mounted workout stations retail for $2,995. The company says it can offer users a total-body workout by generating up to 200 pounds of resistance, using an electromagnetic resistance engine instead of classic weights. It competes with other at-home fitness equipment manufacturers Peloton, Hydrow and Lululemon‘s Mirror.

In early March, Tonal and Nordstrom announced a partnership that puts Tonal devices in 40 of Nordstrom’s department stores, to help stir up interest around the brand.

“Physical touch is important to us,” Orady said.

Other prior Tonal investors include Amazon‘s Alexa Fund, tennis star Serena Williams and Golden State Warriors’ Stephen Curry.

Tonal also announced Wednesday a slew of new hires across the business.

It has named Shannon Crespin, previously an executive at Johnson & Johnson, as chief operations officer. Gregory de Gunzburg, who previously served as head of corporate strategy and development for NBCUniversal where he led the launch of Peacock, has been named chief strategy officer. Bryan James, who has held roles at Google and Apple, has landed the role of chief technology officer.

“We’re building out the leadership team and making sure we have the … team that can scale the business beyond an IPO,” Orady said.

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