home gym startup tempo raises $220m to meet surge in demand for its workout device

The Rise of At-Home Fitness and Tempo's Growth

As gyms were forced to close due to the pandemic last year, a significant number of fitness enthusiasts turned to home-based workout solutions. This created a surge in demand for companies specializing in at-home fitness equipment.

Tempo Secures $220 Million in Series C Funding

To address this growing market need, Tempo, a fitness startup established five years ago by Moawia Eldeeb and Josh Augustin, successfully completed a $220 million Series C funding round. SoftBank led the investment.

The company intends to utilize these funds to strengthen its supply chain, maintain pace with increasing consumer demand, and invest in areas like research and development, as well as content creation. Additional investors in this round included Bling Capital, DCM, General Catalyst, Norwest Venture Partners, and Steadfast Capital Ventures.

Tempo's Hardware and Subscription Model

Tempo’s core product, a freestanding cabinet launched in February 2020, features a 42-inch touchscreen integrated with a 3D motion-tracking camera. This technology continuously monitors and provides coaching to users during their workouts.

Currently, three hardware packages are available, beginning at $2,495. These bundles include accessories such as barbells, dumbbells, a folding bench, a kettlebell system, a squat rack, a workout mat, a recovery foam roller, and a heart rate monitor, depending on the chosen package.

Access to on-demand and live classes requires a $39 monthly subscription fee.

From SmartSpot to Tempo: A History of Innovation

The origins of Tempo can be traced back to 2015, when Eldeeb and Augustin created SmartSpot, a computer vision-enhanced smart screen designed for gyms.

SmartSpot assisted trainers in analyzing and refining their clients’ exercise form. The data collected through SmartSpot enabled Eldeeb and Augustin to develop a program that identified common movement errors and utilized machine learning to provide personalized recommendations – a key component of the Tempo system.

A Focus on Accessibility and Technology

“Having worked as a personal trainer, I recall hourly rates of $150,” Eldeeb stated. “My goal is to deliver a superior experience to a much wider audience at a significantly lower cost. This necessitates continued investment in the core technology that makes this possible.”

Surging Demand and Supply Chain Challenges

Tempo’s launch coincided with a period of heightened demand for at-home fitness solutions due to the pandemic. The startup experienced a 1,000% increase in sales since initiating pre-orders in early 2020.

However, like many competitors such as Peloton, Tonal, and Echelon, Tempo faced delivery delays, currently ranging from five to seven weeks. To date, Tempo users have collectively completed 5 million workouts, totaling 40,000 hours on their devices.

“The supply chain presented definite challenges,” Eldeeb acknowledged, citing temporary factory closures and reduced operations in 2020. “This was our first experience with scaling production, and we had only manufactured small quantities previously. Prioritizing the safety of factory workers led to a temporary reduction in sales.”

Future Growth and Market Potential

Tempo recognizes a substantial opportunity for expansion, as the global market is projected to reach $29.4 billion by 2025. The new funding will be used to enhance logistics, strengthen the supply chain, increase employee numbers, and broaden content offerings, including yoga and boxing classes later in the year.

The Future of Fitness: At-Home, Gym, or Hybrid?

As vaccinations increase and gyms reopen, it remains to be seen whether individuals will maintain their at-home fitness routines, return to traditional gyms, or embrace a combination of both.

Eldeeb believes that the convenience of home workouts will encourage continued adoption, citing a Consumer Trends report from The New Consumer, which indicates that 81% of individuals under 40 prefer exercising at home.

If this trend holds true, companies like Tempo are well-positioned to benefit from the ongoing shift towards at-home fitness.

Source: https://techcrunch.com/2021/01/12/companies-rush-to-replace-the-gym-at-ces/