Peloton is now a unicorn because of the spinning class furor

Have you ever taken aclass at SoulCycle? Or better yet, Flywheel?

Spinning has turned out to be a big business and theres one brand thats been gaining traction in the at-home fitness space. Pelotons $2000 motorcycles have developed a cult following, principally because of its live-streamedclasses, which are offered as an added subscription and can be displayed on the motorcycle screen.

The price of the machines may seem steep, but investors are betting that this is a billion-dollar company. Wellington Management, Fidelity Investments, Kleiner Perkins and True Venturesled a $325 million Series E financing round, valuing the company at $1.25 billion.Other investors include GGV Capital and Comcast NBCUniversal.

We are changing the route people engage in fitness, said Peloton Founder and CEO John Foley, in a statement.This financing will allow us to expand our product and content offerings, open new showrooms across the country, and continue to innovate the experience we offer our members at every touchpoint.

Noted Kleiner Perkins investor Mary Meeker was also quoted in the release about why shes the investment in the company. Peloton is supporting especially broad subscriber engagement and growth. We believe Peloton is the leader in a new business that has significant potential, physical interactive media.

Ive taken a couple of Peloton classes at their New York studio and liked them. Thehigh-energy teachers and the detailed metrics on the Peloton bikes were enough motivating for a productiveworkout.

Not everyone lives by a greatspinning studio, so I can see how the at-home classescan be appealing. Peloton may be suitable for people who have the money and the space for the equipment. Once the upfront expense for the bike is paid for, the class subscription is just $39 per month.

Hans Tung, managing partner of GGV Capital told TechCrunch that they invested because they were blown away by its stickiness, user retention and amazing user feedback. Its off the charts.

Butcompetition or a new fitness furor could be roadblocks for Peloton. Flywheel recently announced that it plans to introduce bikes for the home .

And the high price point for the Peloton bikeswill probably have to come down eventually, ortheir growth could slow. They will likely release updated versions, but its possible that they could run into the GoPro problem, where people dont bother to upgrade.

Perhaps this is why the company recently launched its commercial business, and is selling motorcycles to gyms for $3000 a pop. They say that the highest price is because these machines able to endure more usage, but theyve probably also found that some fitness studios are willing to shell out cashfor upgrades.

This is a different kind of fitness hardware investment for the tech community.Most of the otherbetshad been on wearable tech, such as Fitbit.

Pelotonis headquartered in New York and previously created at least $119 million infinancing since it was founded in 2012.

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