Zwift secures $625m in funding as pandemic takes cycling indoors

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“The Australian market is one of our largest markets,” he said. “The Australians for us are such an influential group. They spend a lot of time on Zwift and are pretty active in the community.”

The investment in Zwift was lead by global investment firm KKR and accompanied by other new investors Permira, Zone 5 Ventures, Specialized Bicycle Components’ venture capital fund and existing investors including True, Highland Europe, Novator and Causeway Media.

Mr Min said the funds will be used to accelerate the development of Zwift’s core software platform and bring Zwift-designed hardware to market.

“This particular round in particular, it’s a sizeable round, it’s all about investing in the product because having a great experience just makes everything else that we do so much easier,” he said.

Mr Min said the only thing that had hampered Zwift’s growth during COVID-19 was suppliers running out of hardware.

“I think the pandemic only accelerated the trend but the broader trend is something that we bet on six years ago, which is that many other industries have been disrupted and have gone online, whether it’s entertainment, whether it’s music, movies, books, gaming, …fitness is going through, will go through that disruption.”

Mr Min said Zwift differed to competitor Peloton which listed on the Nasdaq last year and is valued at $US23 billion as it was more focused on fitness while Zwift focused on sport.

“I think Peloton has been just great for the overall space,” he said. “I think certainly they spend a lot more money than we do on advertising and promoting indoor cycling, so we just want to be in the conversation when people explore opportunities to exercise indoors.”

Mr Min said Zwift had aspirations of listing although there was no timeline for an initial public offering at this stage.

“I think this is the kind of business that will eventually get listed,” he said.

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Stephen Shanley, director at KKR, said Zwift sat at the intersection of digital health, gaming and at-home fitness.

“We see tremendous potential ahead as Zwift invests further in its digital and physical products to enhance the experience for its global community of enthusiastic users,” he said. “This investment fits perfectly with our growth equity strategy of backing leading tech entrepreneurs as they scale globally.”

Cara is the small business editor for The Age and The Sydney Morning Herald based in Melbourne

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