In 2010, Watterson moved aggressively to protect the company’s prized trove of patents. In between another three-year mission to Taiwan in 2004 and the departure of his cofounder Stevenson in 2008 to serve as a member of the Mormon Church's First Quorum of the Seventy, Watterson and Bain built the company into the world’s largest maker of fitness equipment. Under Bain’s stewardship, the firm quickly snapped up fitness brands such as NordicTrack in 1999 and Freemotion in 2000. Five years later, private equity firm Bain Capital-then led by Mitt Romney- acquired a majority stake in Weslo from Weider in a $370 million leveraged buyout. Watterson and Stevenson sold most of the company to Weider Health and Fitness for an undisclosed amount in 1989, with the two cofounders still minority partners and Watterson CEO. After returning home from Taiwan and graduating with a business degree and a minor in Chinese in 1979, Watterson pivoted to selling wood-burning stoves and later exercise bikes and treadmills, sold under the ProForm brand and largely manufactured in Taiwan. It was also the same year he and his classmate Gary Stevenson started a company called Weslo-with the help of a $2,000 loan from Watterson’s father-that sold imported furniture from Asia. That’s when he took a break from his studies at Utah State to travel to Taipei for a two-year mission to spread the Mormon faith. He didn’t stray too far from home until 1977, when he was age 22. Scott Watterson was raised in a Mormon family in the small college town of Logan, Utah. “I like to keep the keys to my front door and don't like to share those too often,” says Watterson. While that case was settled in 2017, the legal battles heated up again when Peloton sued iFIT in May last year, and there are now at least three ongoing lawsuits between the two companies. Those closely-held patents are at the heart of iFIT’s fight against Peloton: iFIT first sued Peloton in 2016 for patent infringement over its signature bike, claiming Foley had copied the technology from iFIT. And it’s still adding to its arsenal of more than 400 patents, recently unveiling a new workout mode that automatically adjusts incline and resistance based on a target heart rate.
#MOVE MY DUE DATE UP WITH LA FITNESS SERIES#
It’s also getting into mindfulness, introducing a series of mindfulness exercises and yoga classes called iFIT Mind. It’s adding 100 new workouts a month and partnered with Planet Fitness, which now has a minority stake, in a deal that grew its workout library to nearly 15,000 classes, making it 50% larger than Peloton’s. iFIT is continuing to roll out new products, including its own fitness mirror, the ‘Vault’, launched in January. Of course, Watterson isn’t going down without a fight. And Beachbody, which saw digital subscriptions to its fitness streaming platform grow by 53% in 2020, went public in a merger with exercise bike maker Myx Fitness and a blank-check company in June in a deal that transformed it into an instant threat to both Peloton and iFIT while making its cofounder Carl Daikeler into a billionaire.
Spin bike studio SoulCycle is also getting into home fitness, launching its own at-home bike in October, while Apple is now competing for eyeballs and muscles after debuting its Fitness+ service in December. Five newcomers including AI-powered fitness mirror startup Tempo and strength training machine maker Tonal have collectively raised more than $800 million since January 2020, while Lululemon acquired fitness device maker Mirror for $500 million last June.
They’re not the only ones fighting for a cut of the booming $244 billion global market for fitness classes, equipment and wearables.
That’s more than Foley’s $2 billion fortune, which is largely made up of his 6% stake in Peloton including options. That deal valued the company at $7 billion, and Forbes estimates that Watterson’s majority stake in iFIT is worth $3.2 billion ( Forbes applies a 10% discount to valuations of private companies). IFIT is now planning its own public listing, less than a year after securing a $200 million investment from Bernard Arnault-backed private equity outfit L Catterton in October.
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