Tonal seeks more than $100M in financing

The home fitness company Tonal is seeking fresh financing that could value it at $1.9 billion, Bloomberg reports.

Why it matters: While the at-home fitness trend has subsided with more people returning to gyms, the company continues to grow and will need the cash to expand, according to Bloomberg, citing sources familiar.

Driving the news: The company, which sells a connected home workout station for a $3,495 price tag, expects to raise over $100 million in funding, giving the company growth capital despite supply chain challenges that have beset rivals like Peloton.

• Dragoneer Investment Group and L Catterton already sit at its cap table and could be familiar faces this round, Bloomberg says.
• Tonal has drawn dollars from celebrity athletes such as Serena Williams and Mike Tyson and Amazon's Alexa fund.

💭 Our thought bubble: It's a bold move considering private companies are reluctant to raise money right now, given difficulties with price-setting and strained financing markets.

• That said, this could position the company for better profitability, and potentially, an IPO.

Flashback: “The public markets are no longer rewarding hyper growth when it comes at the expense of profitability. And as such, private market investors are no longer investing as many dollars or as aggressively to support businesses through hypergrowth,” Tonal CEO Aly Orady told CNBC in July.

• The company said it was laying off 35% of its then 750-strong workforce that month, following industry peers that have reduced headcount to rein in expenses and manage changing consumer demand.

Be smart: Tonal's closest comp, publicly traded Peloton, said it lost $1.2 billion in the second quarter, as it hiked its subscription costs, shuttered retail locations, and instituted several rounds of layoffs to right the course.

Tonal did not respond to request for comment.