Rowing company Hydrow acquires a majority stake in Speede Fitness as current Hydrow CEO steps down.

Hydrow, the at-home rowing machine maker, has acquired a majority stake in Speede Fitness, the company behind the AI-enabled strength training machine.

The rowing startup also announced that CEO and founder Bruce Smith will step down, and President and CFO John Stellato will take over day-to-day operations, per CNBC. Smith is now the chairman of Hydrow’s board.

Hydrow purchased a majority position, it’s possible that the company may acquire the remainder of Speede, but it is uncertain at this time.

About Hydrow

Founded in 2017, Hydrow’s connected rowing machines (which range from $1,695 to $3,995) simulate the feeling of rowing on water through a patented electromagnetic and computer-controlled drag mechanism. The company has raised $300 million to date and touts notable investors such as Activant Capital, Constitution Capital, L Catterton, Liberty Street, RX3 and Sandbridge Capital, as well as several professional athletes and celebrities like Travis Kelce and Justin Timberlake.

As of April, Hydrow Rower unit sales were up 35% year over year. Amazon sales are up 273% as Hydrow expanded from direct to consumer to embrace third party resellers.

The later Hydrow Wave Rower has a price tag of $1,895, which is $600 less than the Classic Hydrow rower ($2,495). The Wave ships directly via UPS and can be stood up when not in use allowing more room to roll out your mat for other exercise options if your workout space is on the smaller size. The Hydrow Wave indoor rower is also available on Amazon.

As Hydrow aims to become a “whole-body health company,” the acquisition allows it to expand into strength-focused experiences, which the company will integrate into its connected fitness platform by 2025. In addition to rowing, Hydrow offers other workouts like yoga, Pilates and functional movement.

About Speede

Backed by NFL athletes (Cole Kmet, Jaylon Johnson and Justin Simmons), Speede Fitness offers a full-body home gym experience, combining isotonic, isokinetic and eccentric training to provide more challenging and effective workouts. Product prices range from $4,995 to $5,995 with a $39/month subscription fee for workouts.

Strength Training Segment Growth

Connected rowing company Hydrow, which Peloton once tried to buy, is growing at a time when the pandemic darling is shrinking. Hydrow is expanding into strength training, one of the fastest-growing segments in fitness today. The acquisition comes as gym goers pull back on cardio exercises such as running and biking in favor of weight training. Planet Fitness said in November that it would replace its cardio equipment more slowly, in part to free up capital.

Life Time fitness highlighted a similar trend in its annual fitness survey. More than one-third of respondents said “building muscle” is their No. 1 goal for 2024, an increase of more than 3% from the prior year.

Speede Fitness makes a connected strength training machine that looks somewhat similar to a BowFlex, but incorporates advanced technology such as artificial intelligence-powered cameras, sensors and a large touch screen.

Peloton Continues to Struggle

Hydrow’s acquisition and sales growth come as Peloton, which is credited with building the connected fitness market, struggles to turn around a slowing business. In its heyday at the height of the Covid-19 pandemic, Peloton tried to acquire Hydrow rather than build its own rowing machine, but Hydrow declined.

Now, Peloton has become an acquisition target itself as numerous private equity firms consider taking it private after it posted another quarter of declining sales and losses.

Peloton has said demand for its fitness equipment has been sluggish as consumers pull back on big-ticket items. Still, Hydrow has managed to grow as Peloton has shrunk.

Hydrow’s delivered unit sales for its connected rowing machine jumped 23% this year from the year-ago period. On Amazon, sales increased 273% in the 12 months that ended March 31 compared to the prior-year period.

Hydrow’s growth raises questions about whether Peloton’s problems are more related to weakness in the broader at-home fitness market or its internal stumbles and product misses. Plus, the company primarily sells cardio machines, which are falling out of favor with consumers, and its own members are flocking to strength training. The company has said its strength training content, not its cycling or running classes, are the most popular type of class for digital members and the No. 2 among those who have Peloton hardware.

Hydrow Members Reaction

Members in the Hydrow Facebook group were happy about the acquisition but worried about another increase in monthly subscription fees and whether strength workouts on the Hydrow app would be minimized or deleted. The initial reaction was the Speede machine was quite large, took up a lot of space, and they may not have room to add more equipment.

It will be interesting to watch Hydrow grow its platform, its integration with Speede and how it attracts more members.

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