Home Gym – Tempo CEO Reveals What’s Next After Its Highest Funding Round Ever
- Tempo just announced a record $220 million Series C funding round, led by SoftBank.
- The funding is the latest major investment in virtual fitness brands, such as Tonal and Moxie.
- Tempo sets itself apart with high-tech features, including infrared 3D sensors that improve form.
- See more stories on Insider’s business page.
Tempo just rode the pandemic’s virtual fitness wave all the way to its largest funding round ever.
The artificial intelligence-powered home gym and training company announced on Tuesday a new $220 million Series C funding round led by SoftBank, bringing its total investments to nearly $300 million while more than tripling its valuation of $250 million in 2020.
According to Tempo CEO and founder Moawia Eldeeb, the investment reflects not just skyrocketing value in digital fitness programs, but rising interest from Wall Street in unique, high-tech exercise systems that go beyond cycling or rowing.
“The company has grown really well and proven that in a competitive space our value proposition has resonated with so many people,” Eldeeb told Insider. “Customers have been happy with the product and investors find Tempo uniquely positioned.”
The funding comes on the heels of several recent high-profile investments in the virtual fitness space, including Tonal securing a $250 million Series E round and inking a deal with Nordstrom as it eyes a possible IPO. It also follows digital-exercise platform Moxie announcing it raised $8 million in seed funding last week as it looks to grow its user base of independent workout instructors.
And while there has been some concern about the longevity of the at-home fitness boom, consumer sentiment toward digital exercise remains strong. According to a January report by McKinsey, home exercise is expected to “experience a lasting increase in participation in 2021,” with 72% of survey respondents stating they participate in digital at-home exercise programs, second only to outdoor individual sports at 84%.
“People have all had to start working out at home and they’ve realized that you can get a more efficient, effective workout at home,” Eldeeb said.
What sets Tempo apart in the increasingly saturated digital fitness arena is its hyperfocus on technology, he added. While the equipment itself looks similar to Mirror with its upright reflective touch screen, Tempo uses infrared light and 3D depth sensors to capture a user’s form and provide real-time feedback and personalized guidance during workouts.
According to Eldeed, Tempo was designed to virtually replicate a high-end personal trainer, which he believes is vital to getting an individual to commit to a health regimen and stick with it. The aim was to “empower the computer with eyes,” he said, and leverage AI to make the system smarter and more customized over time.
For Eldeeb, his passion for personal training is just that — personal. As an Egyptian immigrant, he struggled to learn English as a young boy, until he forged relationships with trainers at his local YMCA that worked with him on both his language and fitness. Later, he was able to get a job as a personal trainer in order to work his way out of homelessness, before attending Columbia University and creating Tempo with his classmate and former client, Josh Augustin.
“The average trainer at an elite training facility who would charge you above $150 an hour has about 270 hours of experience,” he said. “Our AI has seen and trained 40,000 hours across 5 million workouts. That makes it the most effective personal trainer. There’s just no comparison.”
Capitalizing on the ‘early innings’ of virtual fitness
Tempo intends to use the new funding to continue to advance its digital training, while also moving into new fitness verticals like yoga and boxing. The investment will also support Tempo’s supply chain and increased manufacturing, which was stalled due to high demand during the pandemic.
“We ramped up as fast as possible and brought on new manufacturing partners, but we also slowed down sales a bit to allow manufacturing and the workers to be safe while growing the company,” he said.
According to Eldeeb, the company was able to work out the kinks and by the end of 2020 and increased sales ten-fold. A Tempo system retails for $2,495 and an accompanying subscription to live training classes costs $39 a month.
Kyle Lui — an investor at DCM Ventures, an early-stage lead investor in Tempo — told Insider what appealed to him the most about Tempo was its focus on using tech to transform the user experience.
“We care a lot about the customer and product experience,” Lui told Insider. “It’s a core part of what resonates with us when we’re looking at investments and Tempo certainly had that. Their approach to the consumer experience using computer vision and AI is something that’s easier said than done and actually quite difficult to replicate.”
And though the category is becoming increasingly saturated, Lui said he believes there is still room for significant growth in the digital fitness industry, noting that DCM’s investment in Tempo had come well before the onset of the pandemic. He added he is particularly interested in Tempo’s potential to expand its membership base as the sector continues to grow.
“There’s really no reason in my mind why over the next decade, not more than 50% of American households would have an at-home fitness consumer subscription type product,” he said. “I think we’re really just at the early innings.”
Home Gym – Tempo CEO Reveals What’s Next After Its Highest Funding Round Ever]
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