Tonal, a fitness startup with a cadre of celebrity backers, is crunched for cash after failing to find a buyer. The company now may take a drastic step: raising money at a valuation nearly 90% lower than its last one, in a deal that would effectively wipe out the stakes of many existing investors, people familiar with the matter said.
Private equity firm L Catterton, a current Tonal shareholder, is in talks to lead the funding round, which is expected to total $125 million at a valuation of between $200 million and $300 million, the people said. That would compare to the valuation of $1.6 billion at which Tonal last raised money, in 2021. The potential financing would be one of the harshest down rounds for a once high-flying startup that last raised money during the era of low interest rates.