Peloton bike users at the Fairmont Hotel gym in Pittsburgh, PA.
Peloton bike users at the Fairmont Hotel gym in Pittsburgh, PA. - 
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The interconnected exercise machine company Peloton is reportedly working on an initial public offering. According to Bloomberg News, Peloton has chosen Goldman Sachs and JPMorgan Chase to lead the IPO.

Although representatives for Peloton say the seven-year-old company is worth a little over $4 billion, sources told Bloomberg that the IPO could value it at more than $8 billion. The popularity of Peloton has attracted many new entrants to the connected home exercise market, all now vying for a share.

For 36-year-old Eboni Scott, life before her Peloton stationary bike consisted of halfheartedly jogging and ignoring gym memberships. A little over two years ago, she tried the bike. “It was a light bulb moment, like, within the first five minutes,” she said.

The next day, she dropped a few thousand dollars on the bike, and she’s now a regular rider. She loves the exercise, but says what really keeps her coming back is the $39 monthly subscription. The subscription allows her to stream live classes or pull up on-demand classes. While riding at home, she sees a social media-like feed of other riders. The other riders send her virtual high fives when she tackles a particularly hard hill. “I'm showing up because people are expecting me to show up. I have friends all over the country now,” she said.

That social aspect is a big part of the success of interconnected exercise machines, according to Walt Thompson of the American College of Sports Medicine. “Peloton and exercise programs like it allow you to be isolated, yet feel like you belong to a group,” he said. Peloton says it has sold more than 300,000 bikes and has more than a million users

“They've paved the way for a whole new market and we definitely don't think it's a winner-take-all kind of situation,” said Bruce Smith, a former U.S. National Rowing Team coach and the founder and CEO of Crew, which last year brought to market Hydrow, a $2,199 connected indoor rowing machine. It joins a host of other interconnected exercise machines, including the Echelon bike, a weight training system, Tonal, and the $1,500 Mirror, in which an instructor and the user's image are reflected back during a workout. 

Refining the technology in these machines is costly, as is producing daily content. But, Smith says, in the long run, "The real payoff for the business is the subscription. And that involves community and engagement.”

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Follow Erika Beras at @Erika_Beras