Home Fitness Studio Tempo Raises $220 Million to Compete With Mirror and Peloton

By Jemima McEvoy Wednesday, April 14, 2021

Tempo has raised $220 million in a Series C funding round. The San Francisco-based startup sells a home fitness studio that caters to a growing demand for at-home fitness equipment. The business has also been on a fundraising roll recently as it hopes to compete with the other more well-known companies, like Peloton and Mirror, dominating the industry — at least so far.

A man running with dumbbells in his hands.

What Is Tempo?

Tempo is an at-home fitness startup that was launched out of the Bay Area in 2015. The company was founded by two Columbia University graduates Moawia Eldeeb and Josh Augustin, who met while Eldeeb was working at a gym to pay his tuition. The duo discovered they shared a joint interest in computer vision as well as fitness and began to develop the technology for SmartStop, a computer vision-augmented smart screen sold to gyms around the world, which eventually became the startup Tempo.

The company sells an at-home fitness system that includes televised lessons and uses 3D sensors and artificial intelligence (AI) technology to track the movement of users, giving real-time feedback. Like other companies that allow people to complete workouts from home, Tempo reported a surge in interest during the COVID-19 pandemic. The startup told Crunchbase that its business grew tenfold during the year with zero subscription cancellations, a big jump up from just a year ago when “we were just starting to shop 10,000 units … and had very few employees,” according to Eldeeb.

Money and Investors

The company has raised a total of $298.8 million to date, according to Crunchbase. The capital injections in this business came across four different funding rounds, starting in June 2015, when the company raised $1.8 million. The startup then pulled in a much larger sum, $17 million, in a Series A in 2019 involving DCM Ventures.

This most recent round comes less than a year after the at-home fitness business raised $60 million in a Series B led by General Catalyst and Norwest Venture Partners. The Series C closed this month brings the business its largest amount of money to date and involves star-studded investors like SoftBank Vision Fund and STEADFAST Capital. The round also brought previous investors back to the company, including DCM, General Catalyst, Norwest, and Bling Capital.

Unlike in the previous rounds, it was actually the investors that approached the startup, according to the founders. “Investors were telling us that they had a Tempo and have tried them all and knew Tempo was going to be a winner and wanted to be into it now,” Eldeeb told Crunchbase. “It ended up fast-tracking our fundraising by a year.”

The Future of the Company

The startup has plans to continue growing its business using this new funding money. In an announcement of the funding round on its website, the company said it would be investing the capital in elevating the 3D AI sensor technology created by the business, growing class offerings, and improving supply chain functionality. The startup also has a commitment from Best Buy to begin selling its technology in stores in the fall.

Tempo has seized on the momentum of 2020, which saw the at-home fitness market grow by a whopping 40.4% in one year to reach $9.49 million in value. However, it also has other big-name startups to contend with, including Mirror, which was recently acquired by Lululemon for $500 million; Peloton, a workout service that now has a net worth of roughly $26 million; and Tonal, another competitor which recently raised $250 million in a Series E round.

About the Author

Headshot for author Jemima McEvoy

Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.

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