Background: Peloton was founded in 2012 via a Kickstarter campaign and exploded in popularity during COVID, when people were stuck at home. But since the pandemic boom, Peloton's share price has plunged about 95%. And it wasn’t helped by Mr Big who died on a Peloton bike in the Sex and the City movie “And Just Like That."  

What happened: In 2022, Peloton started expanding beyond homes by placing its bikes in hotels like Hyatt and Hilton. Now, it's going a step further by launching a commercial series of bikes and treadmills designed specifically for gyms.    

What else: The move comes as Peloton's consumer sales remain weak, with overall revenue falling 3% last quarter. But its commercial segment grew around 10%. By targeting gyms, hotels, and corporate wellness centres, Peloton is significantly expanding its TAM.  

What's the key learning

💡 Total Addressable Market (TAM) measures the total revenue opportunity if a company captured 100% of demand. For Peloton, the global home fitness equipment market is expected to be about $22 billion in 2026.

💡 Expanding into new markets can massively increase their TAM. Peloton originally targeted households buying home fitness equipment, but selling to gyms, hotels, and corporate wellness centres adds another $21 billion global market TAM.  

💡 But a big TAM doesn't guarantee success. Peloton still needs to convince large gym chains to actually install its machines across their locations.