Zwift has raised a $450 million minority investment from a group led by the investment firm KKR, bringing the virtual cycling brand to a valuation of over $1 billion. The company said that among other things it will use the investment to bring out its own hardware, such as an indoor bike.
Specialized Bicycle’s venture capital fund, Zone 5 Ventures, is also part of the investment, along with the Amazon Alexa Fund and existing investors including True, Highland Europe, Novator and Causeway Media.
Since launching in 2015, Zwift has seen over 2.5 million accounts registered across 190 countries. Usage increased significantly in 2020 due to COVID-19 lockdowns in many areas; Zwift has seen a three-time increase in uploaded activities this year.
Stephen Shanley, the director at KKR, said: “Zwift is the preeminent digital brand for the global cycling community with a best-in-class product that sits 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. This investment fits perfectly with our growth equity strategy of backing leading tech entrepreneurs as they scale globally.”
Eric Min, Zwift’s CEO and co-founder, said: “With this investment, Zwift is primed to operate in a broader fitness market and deliver on our ambition to provide gamified fitness through integrated software and hardware, to anyone who wants to have fun while getting fit at home. We will be accelerating our investment in the core business, improving the overall product experience, and bringing forward new features, more content and Zwift designed hardware, all with the support of KKR and our new outside investors who can help drive our growth. To make this happen, we will be increasing headcount within our core product teams, investing in the very best people. We begin by welcoming Ilkka Paananen to Zwift both as an investor and independent board member.”
Paananen is the co-founder and CEO of Supercell. Shanley is also joining the Zwift board.
KKR’s investment was made through its Next Generation Technology Growth Fund II, a global fund dedicated to growth equity investments in the technology space. This is KKR’s eighth investment through its NGT II fund, following recent investments in ReliaQuest, KnowBe4, Slice, and PolicyGenius in the U.S., and Artlist in Israel. KKR has invested over $10 billion in technology companies over the past five years.
Zone 5 Ventures focuses primarily on minority investments at the intersection of sports, media, technology, and health and wellness. This spring, Zone 5 participated in a Series A investment in Pocket Outdoor Media, BRAIN’s parent.