Courtesy of Hydrow
- Consumer-focused private-equity firm L Catterton has invested in some of the biggest names in fitness, including Peloton, ClassPass, and Equinox.
- It recently led a $20 million round of investment into Hydrow, a high-tech indoor rowing machine that costs north of $2,399.
- A managing partner at L Catterton who worked on the deal told Business Insider he believes that indoor rowing and weight training are the next big trends in fitness.
Private-equity firm L Catterton has a reputation for investing in some of the most disruptive names in fitness — Peloton, ClassPass, and Equinox, to name a few — so when it flags a new trend in the industry, people pay attention.
Business Insider recently spoke to Michael Farello, a managing partner at L Catterton whose fund led a $20 million round of investment in Hydrow, the startup behind a new high-tech rowing machine. Farello said that indoor rowing will become the next big success story in home fitness.
"Rowing as a fitness activity has been growing in the US," he said. "And we think Hydrow has created the most compelling experience."
Hydrow estimates that there are roughly 250,000 active outdoor rowers in the US and that 4.3 million people use indoor rowing machines daily, and according to industry research, the global rowing machines market will grow by 5% by 2022.
Read more: These innovations revolutionized home fitness in 2018
The machine, which is slated to launch this summer and costs north of $2,399 — including three month’s worth of membership fees, which cost $38 a month — is the brainchild of former US national rowing coach Bruce Smith.
Smith has put a different spin on the traditional rowing experience by offering classes that are broadcast live from the rivers of New York and Miami. Some of these classes are taught by members of the US national rowing team.
"If you look to create that Peloton style of experience — highly engaging and highly interactive — [Hydrow is] really in a unique position at this point," Farello said.
Peloton launched in 2012 with its high-tech indoor bike. It’s now valued at $4 billion and reportedly making plans to file for an IPO. L Catterton is constantly on the lookout for the next version of this.
Finding the next Peloton
"We do an inordinate amount of consumer research," Farello said. "We are constantly investing in understanding which categories are likely to grow materially based on underlying consumer trends, independent of the macroeconomic environment."
Farello said that the firm has broadly invested in the health and wellness industry over the course of the last decade. This has included everything from organic food to athletic apparel, and fitness is a logical extension of this, according to Farello.
"It then became a question of: within fitness, where do you see the more differentiated concepts?" he said.
In addition to rowing, Farello is expecting interactive weight-training solutions to have success. He mentioned Tonal, a digital weight machine that uses artificial-intelligence technology to coach users through a session and make recommendations and adjustments to their workout.
"That level of artificial intelligence is really bringing the personal trainer into the home," Farello said. "I think that is the next big wave."
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Source: Business Insider – feedback@businessinsider.com (Mary Hanbury)