The global fitness equipment market exceeded $10 billion in 2020 and is expected to reach $25 billion by 2027, according to Global Market Insights. Equipment that connects smart devices via high-speed Internet and allows them to analyse, store and collect data from any location is the fasted growing segment, gaining popularity among athletes and fitness enthusiasts.
Tonal is a smart home gym that uses artificial intelligence and coaching to provide strength training that is continuing to innovate the category. Much like Tesla revolutionized the electric car by combining software and hardware, Tonal has created a “smart,” electronic-based weight resistance system that uses AI to create personalized, real-time performance feed-back, combined with expert one-on-one coaching.
Founded in 2015 by Aly Orady, Tonal is experiencing explosive growth driven by high customer satisfaction and the backing of high-profile professional athletes like Steph Curry, Serena Williams, Maria Sharapova, Michelle Wie, Sue Bird and Drew Brees who not only endorsed the system for their own use but invested in the company. With its recent E round financing of $250 million led by Dragoneer Investment Group, bringing the total venture funding behind the company to $450 million, the company is currently valued at $1.6 billion. Other investors include Cobalt Capital and Sapphire Sport.
While the smart fitness equipment market is booming, Orady is not typical of most entrepreneurs in the category. At 7 years old, he started coding and at 10, he was building and selling PCs at his family home in Toronto, Canada. He graduated high school at 15 and college at 19. He then moved to Silicon Valley for his first career in super computing, with roles at HP, Sun Microsystems and Samsung.
“I started my career in supercomputers, spent most of my career building enterprise infrastructure—servers, storage arrays and wireless equipment that you bolt onto cell towers. Before tonal I never designed anything I could lift myself without a forklift. But my health when I was 35 was just a complete disaster. I was overweight and was since I was a kid. I had type two diabetes and sleep apnea” says Orady.
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He quit his job and spent the next 9 months getting healthy, losing 70lbs in the process and became passionate about fitness and nutrition and specifically strength training. “One morning I was sitting on a bench at the gym at 6:00 AM staring at this giant cable crossover machine. And I was thinking to myself, I really wish I could figure out how to get this into my one-bedroom apartment. If I could create a weight machine and strength training machine that ran on electricity, not only could I shrink it down and get it into my home, but I could also make it intelligent at the same time,” says Orady.
It all started in that moment, according to Orady, when he realized that if you can build a digital, electronic strength machine, you could actually create the equivalent of a personal trainer and bring that into the home. The one-on-one aspect to Tonal is a key point of differentiation to other smart fitness equipment because most other companies in the connected fitness sector are trying to recreate a group fitness experience found in a gym. He points to the likes of Soul Cycle bringing bikes into the home and various companies that bring bootcamps to the home with treadmills or Orange Theory with connected rowers. “Group fitness was never our goal. Our goal was personal training,” says Orady.
According to Orady, his members on average get 25% stronger in the first 90 days. The data generated from using Tonal is a feedback mechanism that provides a powerful incentive for users to continually improve. He says his typical member is generally the same profile of a person who would consider a personal trainer, which for many people is either too expensive or inconvenient. “What we’ve been able to do is effectively democratize access to personal training with the convenience of them being available at any time,” says Orady.
Today the San Francisco-based company has 300 employees and 50 points of distribution beyond its e-commerce presence, including a partnership with Nordstrom’s at 40 locations for potential members to demo the Tonal system. Orady is also looking to expand his market beyond fitness enthusiasts into rehab applications and has entered into a clinical trial with the Mayo clinic.
Orady looks to combine his history for entrepreneurship, focus on health and passion for fitness to continue to grow the company. And while the company’s growth trajectory and lofty valuation point to an IPO sometime in the near future, no timetable was provided as of this writing.
“I fully expect to be doing this all of the rest of my life,” concludes Orady.