Tonal's CEO, Aly Orady, resigns from his position.
In a significant move for the AI-powered smart home gym brand, Tonal, Krystal Zell has been appointed as the new CEO, succeeding Aly Orady [1]. This leadership change comes at a time when Tonal is facing market challenges and navigating a post-pandemic landscape, which has impacted its valuation and competitive position [1].
The appointment of Zell, whose personal background details are not extensively available in current sources, coincides with Tonal advancing its product technology. Notably, the company has launched Tonal 2 and AI-driven personalized workouts that dynamically adapt to users' real-time performance [2].
Tonal's strength training device now costs $3,995, excluding some accessories, following a price increase of $500 announced in January 2022 [3]. The company has also raised its monthly membership price from $49 to $59.95 during the same period [4].
Despite these changes, Orady expressed confidence in Zell as the new CEO and looks forward to continuing their partnership in technology and product development [5]. He stepped down from the CEO role and became the chief technology officer.
Tonal's latest funding round, which brought in $130 million, was led by existing investors such as L Catterton, Cobalt, Dragoneer, Kindred Ventures, and THVC [6]. However, this funding is significantly lower than its previous fundraise in March 2021, which brought in $250 million [7].
The company's valuation has fallen to between $550 million and $600 million since its previous fundraise [8]. In an effort to cut costs, Tonal is planning to reduce its workforce by 35% [9].
Meanwhile, Tonal's competitor, Peloton, reported its best quarterly performance in a year this February. Second-quarter revenue reached $792.7 million, and the net loss narrowed to $335.4 million from $439.4 million the year before. However, subscription revenue fell from $412.3 million in the previous quarter to $411.3 million despite an increase in connected fitness subscribers [10].
Peloton's basic at-home stationary bike costs $1,445, while its treadmill costs $3,495 [3]. The Studio system from fitness company Tempo costs at least $1,695 [11]. Lululemon's home gym device, the Mirror, is $995 without any accompanying accessories [3].
Zell brings a wealth of experience to Tonal, having previously worked at The Home Depot and Starwood Hotels & Resorts Worldwide [12]. Her leadership is expected to help Tonal continue innovating in AI fitness technology and expanding engagement features like live sessions, which are key to membership retention and brand differentiation [5].
References:
- The Information
- Tonal Blog
- CNBC
- Tonal Blog
- TechCrunch
- Tonal Press Release
- Tonal Press Release
- The Wall Street Journal
- CNBC
- CNBC
- Tempo Studio
- The Home Depot
- Starwood Hotels & Resorts Worldwide
- The technology advancements at Tonal, under new CEO Krystal Zell, include the launch of Tonal 2 and AI-driven personalized workouts.
- Despite the price increase and membership fee hike, Tonal aims to reduce costs by cutting its workforce by 35% due to market challenges.
- The falling valuation of Tonal, compared to its previous fundraise, has been a significant shift in its financial position.
- As the new CEO of Tonal, Zell brings her extensive experience from companies like The Home Depot and Starwood Hotels & Resorts Worldwide to drive innovation in AI fitness technology.
- Meanwhile, Tonal's competitor, Peloton, reported improved financial performance, but a decrease in subscription revenue, despite an increase in connected fitness subscribers.
- The ongoing developments in technology, specifically AI, are shaping the market landscape for both Tonal and Peloton, impacting business models, jobs, and taxes in the sports and fitness industry.
