Fitness startup Tonal has raised new funding and its founder is stepping into a new role, the company said on Monday.
Aly Orady founded the San Francisco company in 2015 and is stepping down as its CEO effective immediately and become CTO, the company said. He will be succeeded by Krystal Zell who joined as its president in July 2022.
The company also announced that it had raised $130 million in new funding from existing investors L Catterton, Cobalt, Dragoneer, Kindred Ventures and THVC.
Monday's announcements are intended to strengthen Tonal's balance sheet, as well as help it work towards profitability and drive growth, the company said in a statement.
“With a robust financial foundation in place, the deep engagement of our members, and partnerships with our vendors, we look to the future with a clear line of focus on serving our members, deepening member engagement, and strengthening member loyalty,” Zell said in a statement. “Tonal was built on a legacy of amplifying the strength that exists in everyone, and I’m excited to help Tonal deliver on that ambitious mission with the continued support of our dedicated team of employees and enthusiastic investors.
The new funding round reportedly valued the company between $550 million and $600 million, the WSJ reported, which would be a steep decline from its previous $1.6 billion valuation in 2021.
Tonal has developed smart home fitness equipment that is designed around a wall-mounted device with adjustable weights. The hardware component costs nearly $4,000 upfront with an additional membership fee to access content.
Like other at-home fitness companies, Tonal benefited from a surge of consumer interest in 2020 but has struggled since then as covid-19 restrictions relaxed over the past couple of years.
The company was reportedly looking for a buyer earlier this year, but those talks fell through, The Information reported in March. One of its potential buyers was at-home cycling company Peloton, though that fell through last year amid Peloton's own struggles and disagreements about a sale price, Bloomberg News reported in February.
