If you haven’t heard of Zwift, founded two years ago in Long Beach, Ca., you aren’t alone. But investors have been following the company. Its massive, multiplayer video game technology, which caters to indoor cyclists, just attracted $27 million in Series A funding in a round that brings Zwift’s total funding to $45 million.
The round was led by the private equity firm Novator Partners out of London, with participation from Shasta Ventures, entrepreneur Max Levchin, and earlier backers, including the Swiss investment firm Waypoint and Samchuly, a maker of bicycle parts that’s headquartered in Korea.
What are they tracking, exactly? Well, a 70-person company that’s been quietly establishing an avid following by merging gaming, indoor cycling and social elements and changing the way that people get fit during colder months and inclement weather.
Indeed, among Zwift’s appealing aspects is users’ ability to connect with friends and strangers around the globe for “virtual” group rides and races, which current users often log using the popular cycling and running app Strava. That integration also enables users to see a map of the virtual path they’ve ridden, along with their incline stats and other performance information, like heart rate and cadence. And, like Strava, Zwift users can earn awards and badges — as when they zip through a sprint section the fastest.
Zwift doesn’t cost a fortune, either. In fact, a large part of its appeal is its affordability. It’s a little like a gamified Peloton, except that users needn’t buy a $2,000 stationary bike to get started. They can use the bikes they already own, along with their own trainers (which turn road bikes into stationary bikes). The cost? Just $10 per month.
So far, 200,000 people have signed up for the service, though not all are paying subscribers yet, says the company. (Beyond a trial period, a user has to start paying in order to use the service.)
That number might be bigger if users didn’t have to rely on their laptops when using Zwift. Luckily, they won’t much longer, says Zwift co-founder and CEO Eric Min, who previously co-founded an energy trading and risk management company and decided a couple of years ago that Zwift would be more fun. According to Min, an iOS app, which the company released in beta not long ago, will be released to the wider public soon. (An Android app is coming next year, he says.)
Expect to see Zwift in many more places after that, according to Min, who says that “we’ve been waiting for the iOS platform to arrive to accelerate our business,” he says.
A separate challenge is simply getting people who haven’t tried the service to understand why they should. But Min doesn’t seem daunted by that either. He notes that the company has grown solely through word of mouth so far, and he expects that trend to continue. In fact, he says Zwift has “big ambitions” that extend well beyond the hard-core cyclists who’ve found the company on their own.
“I think people thought what we were doing was really niche, but we think the opportunity is very large,” he says. “We’re going not just after traditional cyclists but anyone who wants to be more fit. Anyone who buys a Fitbit device is our target market.”
To learn more about the company, check out the write-up our colleague Felicia Williams recently put together, as well as the video segment she produced, below.
(Update: This post originally stated that users need “smart” trainers in order to use Zwift’s technology; that’s incorrect, apologies.)