- Investors are betting that indoor rowing will become the next big craze in high-tech at-home fitness and say that it has the potential to overtake indoor cycling.
- The main player in this market is Hydrow at the moment, but Peloton is rumored to be creating its own version of the indoor rowing machine.
- A managing partner at private equity firm L Catterton, with more than a decade of experience in the field, told Business Insider why he thinks indoor rowing is the next big thing.
- Visit Business Insider's homepage for more stories.
Thanks largely to Peloton, the high-tech home fitness market has been dominated by indoor cycling. Peloton is considered to be an early pioneer of this sector, paving the way with its $2,000 bike that launched in 2014 and has become widely popular.
In the years since Peloton's bike launch, new companies have entered the market offering their own versions of a connected bike. And other players have entered the market with completely new home workout concepts – Tonal and Mirror, for example.
Peloton has diverged from its core product, though with less success. Its $4,000 treadmill launched with a fanfare in 2018, but it has failed to catch as its bike has, perhaps due to its hefty price tag and even heftier size.
So for now, investors are still looking for the next big trend in the high-tech home fitness market.
In a recent conversation with Business Insider, Michael Farello, a managing partner at L Catterton – a consumer-focused private equity firm that is invested in several fitness companies including Equinox – explained why he has his sights firmly set on indoor rowing.
'We see it as the fastest-growing modality in fitness'
Indoor rowing has been a growing trend in the fitness industry in recent years. Up until a few years ago, most consumers would have only crossed paths with the rowing machine on the gym floor or as part of a boot camp class at Orange Theory or CrossFit. But more recently, indoor rowing classes have become more prevalent as studio chains such as CityRow and Row House have cropped up.
In the home fitness space, the main player at this point is Hydrow, which was set up in 2017 by Bruce Smith, a former US National rowing coach. The unique selling point of Smith's $2,200 connected rowing machine is that it enables customers to live-stream classes that are led by professional athletes on the water in cities such as Miami, London, and San Francisco.
Hydrow might soon have competition. Peloton is also rumored to be launching its own version of the rowing machine.
L Catterton, which was also an early investor in Peloton and been invested in Hydrow since 2019, led a $25 million round of funding into Hydrow last month on the basis that it believes rowing has the potential to overtake cycling in the next few years.
"We see it as the fastest-growing modality in fitness," Farello, who oversaw the deal, said in a recent conversation with Business Insider.
He pointed out that customer data has shown so far that 25% of people buying the product have never been on a rower before and 50% have never owned a rower before. "You are pulling in a lot of people that find the modality interesting and the full-body workout compelling," he said.
Moreover, the level of engagement amongst its users is far more impressive than he had first expected. While recent usage data will undoubtedly be skewed by the pandemic as customers work out more at home, the numbers show that it isn't far off from Peloton in terms of engagement metrics.
"The average person is working out 14 times a month, which at this stage for early adoption is extraordinarily compelling," Farello said. By comparison, Peloton customers were using its connected fitness devices 17.7 times a month during the lockdown, according to its most recent earnings results.
Farello said at the moment, around 12 million people in the US are on a rower every year; four million people each week. These people are generally using the machine in other fitness classes.
"We think we can extend it even further because we are bringing people in that have never been on a rower before. There is definitely momentum there," he said.
And the major advantage that rowing has over cycling is that it offers a full-body workout, exercising around 86% of the muscles in the body, an English Institute of Sport study found, while cycling targets abut 44% of the body's muscles.
In addition, the rowing machine lends itself well to partnering up with other workouts, he said. It's easy to roll out a mat alongside the rowing machine and take another class such as Yoga or Pilates and pivot between that and rowing in a way that wouldn't be so easy with a bike, for example.
While Hydrow is well-positioned to benefit from the current climate as fitness studios and gyms remain closed and consumers continue to pour money into home fitness, Farello believes its distinctive user experience will also set it apart from rivals such as Peloton should it come out with its own version of a rowing machine.
"Hydrow is a distinctive product regardless of whatever else is launched," he said."I don't see anybody that is replicating that live experience."
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