John Foley began 2022 as co-founder and CEO of Peloton, when its pandemic shine had begun to tarnish. He'll end the year as co-founder and CEO of an entirely different startup, a direct-to-consumer custom rug business called Ernesta.
Driving the news: Ernesta on Monday announced $25 million in Series A funding. Addition led, and was joined by True Ventures.
- Both VC firms have early ties to Peloton. Addition was founded by Lee Fixel, who backed Peloton's Series B round via Tiger Global, while True Ventures joined in Peloton's Series C and took a board seat.
- Foley is being joined by fellow Peloton co-founders Hisao Kushi (chief legal officer) and Yony Feng (chief technology officer). Plus a slew of other former Peloton execs.
The big picture: Foley tells Axios that the pitch is to sell custom rugs at the same price as store-bought, precut rugs.
- Ernesta buys rolls of carpet from the big manufacturers in Dalton, Ga., and then does the custom cutting and binding itself.
- “You might buy your first rug from Home Depot or Walmart, and then maybe later you're able to afford something from a place like Pottery Barn,” Foley explains. “And then, just a fairly small number of people get to work with designers to get something much bigger and more beautiful and better for sound and comfort — really elevating their space. We want to make that experience accessible for regular people.”
Risk factors: Foley acknowledges that custom rugs might not be top-of-mind for many, given an increasingly fraught economy, although he insists that people still will seek to protect the hardwood floors of their most valuable asset.
Lessons learned: Foley says that a throughline between Peloton and Ernesta is an understanding that every customer touch point matters, including interacting with online communities that spring up around the product.
- He also lamented “racing” to take Peloton public. “I'd like to be in control of our financial fate a bit better this time.”
The bottom line: It's common for founders to have a second act after licking their wounds. This one is coming a bit sooner than expected.
Originally published on Axios.com
