(Bloomberg) -- Goldman Sachs Group Inc. is leading a $65 million financing in Echelon Fitness, giving the bank and another investor a controlling stake in a maker of exercise machines as more people work out at home amid the pandemic.
The Chattanooga, Tennessee-based company competes with Peloton Interactive Inc., Lululemon Athletica Inc.’s Mirror, Tonal, Tempo, Icon’s NordicTrack, Hydrow and other connected fitness companies with products such as a technology-enabled treadmill, exercise rowers and bikes that are more affordable than most rivals.
Its entry-level bike, for instance, was on sale for about $500 on Walmart’s website over the weekend, while its top-of-the-line bike retails for about $1,600 on Amazon. Peloton’s bike, by comparison, was listed at $1,895, marked down from $2,245.
Goldman invested in Echelon through GS Growth, part of New York firm’s merchant banking division. Piper Sandler advised Echelon on the financing, which also resulted in additional funding from North Castle Partners, which together with Goldman holds the controlling interest.
“We are excited about their omnichannel and multi-product offering that enables a broader reach to retailers and consumers alike,” Stephen Kerns, a member of GS Growth, said in an emailed statement.
In 2020, Echelon’s revenue soared by more than 500% to exceed $100 million, with its app delivering both live and on-demand classes to more than 100,000 users.
North Castle, which invested in Echelon last year before the virus outbreak, participated in the recent financing as the company experienced “explosive growth,” said Jon Canarick, managing partner at the Greenwich, Connecticut-based private equity firm.
During the pandemic, companies operating in the health and wellness sphere have attracted institutional investors, in part due to expectations of ongoing growth. Calm, Strava, Zwift, Whoop and Hyperice are among closely-held companies that have raised millions of dollars this year from venture capital and private equity firms, among others.
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