Virtual strength training startup Ladder raised $105 million, CEO Gregory Stewart tells Axios exclusively.
Why it matters: The investors structured the financing to get Ladder's subscription model to positive cash flow.
How it works: The Austin, Texas-based company offers a $29.99 monthly subscription that includes access to progressive, structured workouts designed to be completed at the gym or home.
Zoom in: The financing comprises a $15 million Series B led by Point72 Ventures and ADvantage VC and $90 million from General Catalyst's Customer Value program.
- New investor PagsGroup and existing investors Tapestry VC and LivWell Ventures also participated in the Series B.
Between the lines: General Catalyst's investment commitment will fund monthly over time to meet anticipated customer acquisition, which will help shift Ladder's business to cash-flow generative, versus cash burning, Stewart says.
What's next: The company hopes to hit $100 million in annual recurring revenue by 2026. It's set to hit 150,000-plus paid members by this year's end, with hopes to hit 400,000 by the end of 2025.
- In the immediate term, Ladder will use proceeds to develop an Android version of its product and expand into corporate wellness.
What we're watching: As it expands its consumer business, Ladder is starting to flesh out its enterprise offering.
- Users are already submitting reimbursement for Ladder to their workplaces, while more companies are reaching out to ask about an enterprise-level version, Stewart says.
- "That's the blue ocean at the moment," says ADvantage partner Jeremy Pressman, citing a heightened wellness appetite from employers.
Catch up quick: Ladder wasn't pursuing a Series B, after being well-capitalized following a Series A late last year, Stewart says.
Yes, but: Ladder, which kept in touch with Point72 Ventures and ADvantage over the years, was subsequently introduced to General Catalyst by a mutual acquaintance, he adds.
- "They were solving a really specific problem around investment in customer acquisition," he says.
- Ladder is trying to balance investing in new initiatives with onboarding new members — and saw an opportunity to hit both goals with this funding, he adds.
What they're saying: "What we see happens quite frequently is that companies will be able to go from zero to one — or in this case, up to $10 million in ARR — and then they'll get stuck between $10 and ... $50 million," Pressman says.
- Ladder's focus on building out successful coaches and a strong referral network sets it up for growth beyond that range, he adds.
