Fitness app Strava is seeing a surge in user growth and just raised fresh funding at a $2.2 billion valuation.
Strava CEO Michael Martin joins Catalysts to explain how the company is using the money to expand across more sports and explore future opportunities, including a potential public offering.
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
Fitness app Strava, which has more than 150 million users globally, closed its latest fundraising round with a valuation of $2.2 billion. Strava announced its acquisition of Runa and the Breakaway as well. Joining us now to discuss how the company's putting that funding to work. Michael Martin, Strava CEO, Morning Brief co-host Brad Smith, Avid Fitness Guys also uh with us here. Mike, thank you so much for joining us. I am a Strava user. I have to admit. I use it um to document my hikes specifically. Um, so how how are you guys as you do this new fundraising? What is the goal? What is the plan for expansion?
Yeah, thank you, Julie. Uh, thank you, Brad, both for being uh uh customers, but also for having me on. Um, so Strava is coming off a year of historic growth. So we saw uh 50% year-on-year growth uh last year and Q1 of this year is actually growing even faster. Um, that growth has given us great opportunity uh to to look at cross the the fitness industry as a whole and try to think about how we can better serve consumers um across all different sports. So, you're right by calling uh Strava a fitness app and uh that you both have different ways that you engage with it. We support 50 different types of fitness. Right now, running is booming, but but truly hiking is is is building up uh quickly as well. And we went and did this round specifically so we could not only build upon that organic growth, but we could have the opportunity to go and add in some best of breed uh uh offerings to further deepen our ability to support many different types of sport.
Michael, as people who engage with Strava and also you have an overlap perhaps in that Venn diagram of potential future investors as well that would love to see this company be publicly traded here. What does this funding do towards getting Strava more in that realm or the mindset of potentially going public?
Well, we're in a really unique uh situation right now. Um, not only is the the business uh profitable and has been profitable for uh more than four years now. The free cash flow continues to to grow substantially and that put us in a great situation to be able to both do this round, but then also uh draw upon those cash reserves and do a little bit of tactical uh um debt financing as well with uh JP Morgan Chase and Wells Fargo. Combining those three things together gave us a great cost of capital and uh a way to pursue our plans. Um, in terms of, you know, something like a a future public listing, I would just say that the the future is extremely bright for us right now. Um, I wouldn't rule that out, uh, but I don't think we need to do it at this moment in time. Um, I do think as we continue down this path, uh, all kinds of opportunities like that become more and more certain.
