Hydrow, a maker of $2,199 rowing machines that competes against Peloton Interactive Inc. for a share of the at-home fitness market, raised $25 million from investors led by L Catterton, a LVMH-backed private equity firm.
The Cambridge, Massachusetts-based startup, which has seen sales jump by 400% during the pandemic, intends to expand rowing content and mat-based strength and yoga offerings, Chief Executive Officer Bruce Smith said in an interview. The proceeds will also help pay for nationwide sales and marketing efforts as it focuses on direct-to-consumer distribution, Smith said.
“We want to encourage people to not just row but to improve their functional movement,” Smith said. Hydrow hasn’t seen the traditional summer slowdown in engagement in the U.S. this year as lockdowns to curb the spread of Covid-19 force more people to exercise at home.
Hydrow has partnerships with schools including Texas A&M University, Boston’s Suffolk University and Babson College. Its machines are also available at high-end locations such as the Boca Raton Beach Club, a Waldorf Astoria resort, the Drake in Chicago and the Residences at the Ritz-Carlton, Dallas, as well as gyms including Anatomy in Miami.
“The pandemic has accelerated the adoption of at-home fitness but we strongly believe that people will go back to the gym,” Smith said. “So we want to be at home, at the gym, at your hotel and when your kids go to college, we’ll be there too.”
Michael Farello, the L Catterton managing partner who oversees the investment in Hydrow, says he uses his machine — which simulates on-water rowing through streaming classes — about nine times a month, compared with the average Hydrow user who records around 14 monthly workouts. Peloton said on an earnings call last month that its average subscriber worked out out 17.7 times on average in the quarter through March 31, up from 13.9 a year earlier.
“Since our first investment in February 2019, we’ve seen incredible growth as Hydrow resonates with consumers,” Farello said in a phone interview. “It’s also a validation that professional athletes have been training with Hydrow during the pandemic.”
In addition to L Catterton, existing Hydrow investors including Rx3 Ventures, co-founded by Green Bay Packers quarterback Aaron Rodgers, participated in the new round, lifting the company’s total capital raised to $52 million. The startup is now valued at more than $100 million.
Hydrow counts professional tennis player Sloane Stephens, NBA player Carmelo Anthony and ESPN’s Adam Schefter among its celebrity users.