expresso.bmpExpresso Fitness, a Sunnyvale, Calif. company that provides a way for you to interact with a video screen while riding a stationary fitness bike, said it has raised $9.3M in a third round of financing.

The technology is significant because it brings interaction into the huge U.S. fitness services market, estimated by Expresso to be worth $14.39 billion last year. Of that, the majority comes from peoples’ payments to gyms in the form of dues/memberships. About $4.32 billion was made last year from “non-dues” services, i.e., the portion Expresso is targeting.

The company’s software lets you do things like race against a “ghost” on the screen alongside you. You can set the software so that the ghost rides at your personal best on a charted course. That way, you can try to beat it, as you race along the virtual hills, or valleys (you can choose a number of landscapes, and skill levels). You can also connect friends so that they race alongside you; you can see where they are on the course via a little map on the screen.

We tested this product late last year. We liked the experience as far as it went. Expresso lets you log each ride into its system so that you can monitor your progress over time. You can then use any Web browser to view your fitness progress.

However, we believe it should be taken a lot further. This is no Web 2.0 product. It is a relatively closed system, prohibiting full interaction with the Internet. Ideally, Expresso would open its software to let outside developers build programs for it. Also, while interactivity sounded intriguing before we got on the bike to try it out, the experience was less than we’d anticipated. There are realistic parts: If you start climbing a hill, you have to downshift gears and pedal much harder. But there are significant drawbacks: While the course on your screen turns corners, for example, your actual exercise bike doesn’t (it doesn’t lean, and moving handle bars does nothing).

The whole system, including the bike and software, costs $4,995.

The company also faces challenges in its efforts to sell to gyms and other for-profit fitness organizations. Those gyms often have few incentives to allow their customers to become too enraptured of the biking experience, because it means the customers will never leave, making it difficult to bring in new customers. Indeed, this is one reason why Expresso has been slow to open its system up to full interaction with the Web.

We mentioned this company two years ago, when it raised $4.5 million in its second round.

Sierra Ventures, a new investor to Expresso, led the latest round, and was joined by existing investor, San Diego-based Enterprise Partners Venture Capital.

expressoscreen2.bmp