Gaming fitness company Zwift has raised $450m (£344.5m) in a deal that will value it in excess of $1bn.
The company, which operates a platform for runners to race against one another from inside their own homes on a treadmill and cyclists to do the same on a static bike, will use the money to double its headcount to 700 within the next two years.
Zwift's US headquarters are in Long Beach, California, with its European headquarters based in London.
US private equity fund KKR led the investment round with new fellow investors Permira, Specialised Bicycle Components, and Zone 5 Ventures.
“It’s amazing, but to make something really simple to use, requires a massive amount of investment,” said chief executive Eric Min.
“It’s all about investing in the production, the experience, the content, the hardware. We’ll be spending on the end to end experience. It’s what we’re really focused on.”
The Zwift co-founder also said it had benefited from the pandemic in that people were forced to spend more time at home.
“Like many other businesses that have been transformed and digitised, I felt that fitness would eventually get there and Covid-19 has only accelerated that,” he said.
“We think it’s probably accelerated our business by more than a year. But more importantly there is a general thematic macro trend towards doing more things from home.”
Zwift relies on the “gamification” of fitness in a similar way to that of tracking app Strava and cycling offering Peloton. There have been some reports that gamification can force people to exercise too much and become addicted to it.
“In almost everything that exists, there are people who do too much and we certainly have customers who probably do a bit too much, but on balance we’re keeping more people active,” he said.
On the Zwift platforms, users connect their bikes or runners to a screen that then generates a 3D environment to race in. The company’s service can allow runners to scale mountains across 10 different worlds. Since launching in 2015, there have been 2.5 million accounts registered across 190 countries.
KKR director Stephen Shanley said Zwift was the “preeminent digital brand for the global cycling community”.
“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.”