Toronto startup hopes to row around Peloton’s shark-infested waters.
Aviron, which has rode the same pandemic-driven rise in demand for at-home fitness solutions as Peloton, has secured $23.6 million CAD ($18.5 million USD) in Series A financing to fuel the growth of its connected rowing product.
The Toronto-based fitness tech startup combines gaming with high-intensity interval training, describing its offering as a “gaming-led, smart rowing machine.” Aviron’s rowing machine is built on a gaming engine designed by former Unity developers.
Even as Peloton struggles, Aviron remains bullish on the outlook for the at-home connected fitness industry.
Part of a growing wave of connected fitness companies, Aviron plans to use the proceeds to ramp up its product and content development efforts, bolster its presence in the United States (US), and expand its inventory to meet consumer demand. Even as Peloton struggles, Aviron remains bullish on the outlook for the at-home connected fitness industry, where it expects to continue to see strong growth, despite the return to gyms as pandemic shutdowns subside.
“We think there will be continued, and growing demand for addictive game-based content in the comfort of our users’ own home,” Aviron founder and CEO Andy Hoang told BetaKit. “It is important to note that we started off in B2B, selling to gyms, etc, and that one of our investors is the founder of a national gym chain, validating that hybrid home and gym workouts are here to stay.”
Aviron’s all-equity, all-primary Series A round, which closed in late December, was led by New York-based Stripes. The startup’s financing also saw follow-on participation from Berlin’s Global Founders Capital, San Francisco-based Formic Ventures, Los Angeles-based Behind Genius Ventures, and support from new investor 24-Hour Fitness Founder Mark Mastrov. The round brings Aviron’s total funding to about $30 million CAD ($23.5 million USD).
Incorporated in 2015 by Hoang, the former COO of Toronto-founded security video camera provider i3 International, Aviron was originally created as a rowing machine for corporate gyms, launching operations as a company in 2018. However, the startup pivoted to the consumer market during the early days of COVID-19 in July 2020.
“We were already working on a consumer-focused rowing machine but when COVID hit, we accelerated our timeline to meet families in lockdown,” said Hoang. “B2B sales unsurprisingly fell to an all time low in the later quarters of 2020 due to COVID.”
Aviron graduated from Y Combinator in winter 2021. Last summer, the startup announced over $5.7 million CAD ($4.5 million USD) in seed funding to grow its research and development and software teams and improve its logistics and distribution capabilities.
RELATED: LifeSpeak to acquire digital fitness platform Wellbeats for up to $117.9 million CAD
Now, armed with more than quadruple that amount, Aviron plans to double the size of its 36-person team over the next year, with a focus on hiring engineers and software developers as it looks to ramp up its product development efforts and expand its content library.
Aviron also intends to expand its presence in the US, enter the retail market, and “increase [its] inventory investment to guard against supply chain issues.”
“In all of 2021, we were only in stock for 2 weeks,” said Hoang. “Thus, we are purchasing lots of inventory and expanding our retail footprint to ensure we have devices in stock, and are managing our production process to meet demand accordingly.”
Aviron’s business model is twofold: the startup sells its connected rowing machine hardware in two styles for a one-time fee, and then offers hundreds of gamified workout options, including multiplayer video games, group workouts, scenic rowing to its users on a subscription basis.
Amid an increasingly crowded connected fitness space, Hoang views Aviron’s combination of video game elements and rowing as a differentiator. “Our unique integration of video game elements and the comradery of competition makes the workout experience far more enjoyable,” said Hoang.
RELATED: Silofit secures $12.75 million CAD to bring micro-gym model to US
“The Connected Fitness industry is a multi-billion dollar industry, but it’s still in its infancy and growing rapidly,” said Hoang. “But as we looked at the industry, we saw that there was a lack [of] a mental escape, which led us to a gaming-first experience.”
In addition to Aviron, the connected fitness sector also features startup players like California’s FightCamp and Montréal-based Silofit. Canadian-founded, California-based FightCamp focuses on at-home boxing, kickboxing, and mixed martial arts (MMA) training. Meanwhile, Silofit has taken a micro-gym model-based approach, upon which it hopes to layer a connected fitness environment.
The sector is headlined by connected fitness giant Peloton, which saw its sales surge during COVID-19 as consumers turned to home workout tech in light of pandemic shutdowns and public health concerns. However, Peloton has been crushed in the public markets recently, after the company invested heavily in expanding its inventory only to see demand for its flagship stationary bike and treadmill products wane.
This decline in demand and inventory surplus, coupled with some unfortunate recalls, led to major layoffs, a leadership change, and a production freeze at the New York-based company, which has since instituted other cost-cutting measures.
When asked whether he takes away any learning from Peloton’s experience, Hoang told BetaKit that “growth is critical, but not at the expense of core business principles.”
RELATED: How Wheelhouse plans to take on tech’s fitness giants
“One of the reasons investors have been very attracted to Aviron is our strong understanding and focus on unit economics and the bottom line,” said Hoang. “We could have raised more money but we didn’t because of our strong business model. Combine this with an exciting, high-demand product that has low churn and high engagement, and we have a formula for success.”
What other companies have done for spin and running, Aviron aims to do for rowing, a full-body workout activity that can offer a variety of health benefits.
“Despite the benefits of rowing, it hasn’t become mainstream like spin or running because it’s so mentally challenging and boring,” said Stripes Partner Chris Carey, who is joining Aviron’s board as part of the round. “Andy has changed this dynamic with the Aviron rower – he’s created an amazing product that is well designed and offers engaging formats where you forget you’re exercising.”
To help navigate its next stage of growth, Aviron has brought on Nike’s former senior director of product management, Amy Curry-Staschke, as COO. At Nike, Curry-Staschke focused on materials, supply, and inventory planning. Prior to that, she spent years serving in leadership positions at Lululemon and Burton Snowboards.
This stage could involve more competition for Aviron, as according to The Financial Times, Peloton is close to launching its own connected rower product. Peloton also recently took another big step into the world of gamified fitness, rolling out its new Lanebreak in-app video game earlier this month.
Regardless of where consumer demand for fitness solutions goes, Hoang says Aviron is prepared. “If customers shift from home to gyms, stay at home, or switch to hybrid, we market and provide a solution to both sides,” he said.
Feature image courtesy Aviron.