Home fitness startup Tonal is looking to raise fresh capital as costs mount amidst the volatile macroeconomic conditions, sources told The Information.
In addition, the company is considering sale options. The company burned through $2.4B in cash by mid-2022. To curb expenses, the firm shut down several retail outlets, announced layoffs, and cut back on marketing expenses.
- The firm roped in Netflix CFO Barry McCarthy to take over the reins from founder and CEO John Foley last year.
- Tonal raised product and service prices in response to rising inflation, costs, and macroeconomic conditions.
- It is also embroiled in a legal battle with supplier Foxconn for failing to make payments after agreeing to pay the $5M owed in weekly installments.
- The San Francisco-based firm has been backed by VCs such as Dragoneer Investment Group, L Catterton, and Shasta Ventures.
- It last raised $100M in funding at a $1.9B valuation in mid-2022, offering investors a 2x liquidation preference.
- It is expected to burn cash until 2024, even if it raises new funds.
- Tonal shares are being offered to investors in the secondary market at a $350M valuation, 80% less than its prior round.
