Yahoo Finance Why TikTok's former CEO Kevin Mayer wants to challenge Peloton
Former TikTok CEO and Disney+ mastermind Kevin Mayer has turned his attention to the surging streaming fitness industry in a bid to challenge industry heavyweight Peloton.
“Peloton doesn’t have a lock on the industry,” Mayer told Yahoo Finance Live, pointing to the yawning total addressable market of the connected fitness space.
Mayer’s vehicle of choice in the battle was disclosed on Wednesday.
Fitness and nutrition player Beachbody said it would merge with blank check company Forest Road Acquisition Corp. Mayer is currently a strategic advisor to Forest Road, and will join Beachbody’s board of directors once public. The deal will have Mayer working closely again with former colleague Tom Staggs — the former Disney COO and CFO is Forest Road’s strategic advisory committee chair.
As part of the deal, connected bike maker Myx Fitness will also merge into Forest Road. The combined entity will be called Beachbody Company, and have a focus on live fitness classes for mobile devices, streaming cycling classes and nutritional supplements.
The deal — expected to close in the second quarter — values the overall company at $2.9 billion. Beachbody will continue to be led by co-founders Carl Daikeler and Jon Congdon.
Indeed, Beachbody has some catching up to do in its new battle with Peloton.
The combined company is estimated to have done $880 million in sales in 2020 on 2.6 million paid digital subscription customers. Since its launch in late 2019, Myx has sold 27,000 of its $1,299 connected bikes. Last year, Myx hauled in $30 million in sales — it estimated in an investor presentation that sales could reach $100 million this year, with a goal of $700 million by 2024.
By comparison, Peloton reported last week it ended its most recent quarter with 4.4 million total members. Total quarterly sales surged 128% year-over-year to $1.1 billion.
For its current fiscal year, Peloton is projecting about $4.1 billion in total revenue and adjusted operating profits of about $300 million.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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