Peerfit, a Tampa-based digital health company, has sold its intellectual property and technology and transferred some personnel, in a deal that founder and CEO Ed Buckley described as a milestone for the business.
Buckley said he could not disclose the name of the buyer, which is a publicly traded firm. He also could not disclose financial terms of the deal, because of a confidentiality agreement.
People familiar with the deal have told the St. Pete Catalyst that it was an eight-figure transaction and that the buyer was Peloton (Nasdaq: PTON), an interactive fitness platform. Neither Peloton nor Buckley would confirm that.
In its Nov. 6 quarterly filing with the U.S. Securities and Exchange Commission, Peloton said that in October, it entered into two separate agreements to purchase various developed technology, intellectual property and related assets for approximately $74 million.
“While we’re a company of builders, we are always open to pursuing acquisitions that accelerate our ability to produce world class products and services for our Members or enter new markets,” a spokesperson for Peloton told Catalyst.
Peerfit, with a digital health platform that connects members with personalized fitness experiences, will continue operations as usual under a transitional technology licensing agreement, Buckley said.
“We are still directly connected to the industry, to our clients and to our mission, to redefine wellness. We’re operating just like we were before the deal. The deal gives us the freedom to continue on the roadmap we had before, to drive innovation to the marketplace.”
No equity was exchanged between Peerfit and the buyer, Buckley said. Peerfit will use the proceeds for a partial shareholder redemption and to fuel the growth of the company.
In addition to being an exciting milestone for Peerfit, “It’s a great achievement for Tampa, that a company that’s built here can go out and do deals like this.”
Peerfit was founded in 2011 and has been one of the more high-profile startups in the Tampa-St. Petersburg area. It has raised $47.9 million from investors over several funding rounds, according to Crunchbase, including a $10 million bridge round in January that was led by Tampa Bay Lightning owner Jeff Vinik and Virgo Investment Group, a San Francisco-based investment firm.
After the onset of the Covid-19 pandemic in March, Peerfit laid off an undisclosed number of employees.
Buckley said he met the CEO of the buyer several years ago, at an industry conference. “We talked years ago about what a potential partnership could look like. When Covid hit, it was something we talked about and it obviously resulted in this transaction.”
Peerfit has two product lines. Its original business, Peerfit Core, is for people under 65 with commercial or employer-provided health insurance coverage. Peerfit Move is provided through Medicare Advantage plans.
“In March when shelter-in-place hit, 100 percent of our credits were being used on at-home streaming workouts,” Buckley said. “In late May, early June, as gyms started reopening the balance of Peerfit credits started swinging back that way. In October, we have a spike in streaming workouts again, and I think that correlates to spikes in coronavirus across the country. As people’s confidence in their own health and safety goes, so goes the swing between in-person and at-home. But one defining characteristic that is here to stay is that people feel comfortable with at-home, so it’s never going to go back to just in-person or at-home. It will be a blend between the two for all consumers, both under 65 and over 65.”
The deal gives Peerfit a tailwind headed into 2021.
“To look at this deal and what it sets up this business to do is a testament to the team, the vision, the direction, the execution – and sticking to what we wanted to do,” Buckley said. “With everything that happened in 2020, to end up in this position, this level of financial strength and confidence in where we are going is an awesome story to tell.”