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Zwift, a Long Beach, California-based startup that develops virtual worlds for cyclists and runners, has raised $120 million in a series B round of funding led by Highland Europe. Additional investors include True, Causeway Media, and Novator.

Founded in 2014, Zwift initially built its business on top of virtual training games for cyclists. The company’s platform connects to physical indoor trainers so that cyclists can pedal inside while immersed in any number of virtual landscapes on a screen in front of them. It also allows friends to join in rides together.

Earlier this year, Zwift expanded into running, inviting runners to follow virtual routes on a screen from treadmills. Zwift also recently launched its first piece of running-related hardware — the $30 RunPod, which attaches to a runner’s shoe — similar to a Garmin Foot Pod — and enables accurate tracking of speed, cadence, and distance.


Prior to now, Zwift had raised north of $40 million, with previous big-name backers including PayPal cofounder Max Levchin. With another $120 million in the bank, the company plans to double down on its expansion into running and esports.


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Above: Zwift’s esports cycling league

Indeed, earlier this week Zwift formally revealed its expansion into esports with the launch of what is thought to be the first professional cycling esports league. The Kiss Super League will feature professional cycling teams that will compete exclusively on Zwift. At launch, it will include Team Wiggins Le Col, a cycling team founded in 2014 by Olympic and Tour de France champion Bradley Wiggins. As an aside here, a significant number of professional cyclists already use Zwift for training, according to the startup’s CEO and cofounder, Eric Min.

“Zwift is now more than ready to propel the business forward by providing innovative offerings that are greater in breadth and depth for cyclists and runners alike,” Min said. “In 2018, more than one third of the Tour de France peloton were Zwifters. With that support already in place, we are in the unique position of being able to combine affordable physical endeavor with video gaming technology, ultimately setting the stage for us to become the first true esport of its kind.”

He makes an interesting point. Esports, already a big business in its own right, is something of a misnomer, given that it basically involves watching other people compete against each other in video games. Putting professional athletes into virtual worlds, where they can physically compete against each other from remote locations while spectators watch, feels like a more accurate interpretation of the term “esports.”

Zwift’s two main hubs today are in Long Beach and London, where Min actually started the business four years ago. His cofounder, Jon Mayfield, is based in Long Beach and is responsible for engineering the Zwift game. The company counts additional hubs in Brazil, Australia, Israel, and — soon — Japan.

Healthy market

Whichever way you slice and dice it, virtual fitness is emerging as a huge market. Earlier this year, New York-based Peloton closed a hefty $550 million round of funding to grow its virtual fitness classes and connected machines, while Mirror raised $25 million and launched a $1,500 connected mirror for virtual fitness classes.


Above: Zwift: Indoor cycling

Last month, Germany-based eGym raised $20 million to grow its connected fitness platform in the U.S. — Highland Europe also invested as part of that series D round.

It’s worth highlighting the size of Zwift’s funding round — $120 million is a big raise for a series B round, which perhaps points to the traction the platform is seeing globally — particularly outside the U.S.

“It’s a highly scalable business, and we’ve been impressed with how they have already managed to expand globally —  already 70 percent of current subscribers are from outside the U.S.,” added Highland Europe partner Tony Zappala. “Research points to an audience of 40 million competitive and enthusiast cyclists, and many of those lie in the traditional cycling nations of Central Europe, so in this market alone there is huge growth potential.”

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