When the Tour de France was postponed at the start of the pandemic, Zwift Inc. came to the rescue with a virtual version of the world’s most prestigious cycling race.

Zwift is well known among weekend warriors as a way to train or compete when it’s too cold or rainy to go outside, or it’s just more convenient. The exercise app connects cyclists riding their bikes inside to real-time races in virtual worlds through a mobile device, computer or Apple TV.

Since the Tour de France in 2020, interest in Zwift has kept growing among serious e-sport racing competitions, its loyal fan base and investors. The company has raised $620 million from backers including KKR & Co., Permira Holdings and Amazon’s Alexa Fund, adding up to a market value of more than $1 billion that’s enabling Zwift to invest in building out its platform.

Co-founder Eric Min, a former JPMorgan Chase & Co. vice president, is eyeing an increase in its subscriber base to 10 million, from roughly 1 million with 80 percent of them men, and possibly taking the company public eventually.

“We estimate there are millions of people who are just sitting on the sidelines,” Min said in an interview, citing the cost of hardware as a barrier to entry. “We have a long way to go until we’ve saturated the market and the cycling industry.”

The company, naturally, draws comparisons with its larger rival Peloton Interactive Inc., one of the most familiar brands in personal fitness. Both companies have cult-like followings with exercise enthusiasts who sweat it out in immersive, online sessions for a monthly subscription fee. But the comparisons stop there.

Peloton is a fitness company that sells stationary bikes — along with treadmills and rowing machines — putting it in competition with other connected exercise equipment makers like NordicTrack and Tonal. Zwift’s emphasis is on the highly-competitive athlete. It doesn’t sell much gear: Users of the platform hook their own bikes up to sensors and a smart trainer — including a new offering, the Zwift Hub for $499 — to race and compete on fantasy routes that mirror everything from Zwift’s futuristic Watopia to the streets of New York City or re-created world championship courses.

At $15 a month for the past five years, Zwift’s subscription charge is “not sustainable” for much longer, Min said, and one option being looked at is locking users into annual memberships. (At Peloton, which charges $44 per month for an all-access membership, subscription revenue is now bigger than hardware sales.) Last year, Zwift scrapped plans to develop its own high-end smart bike to focus on entry-level devices to connect to people’s own bikes.

Zwift’s ambitions to scale up, including breaking further ground into indoor running, come at a precarious moment for the at-home fitness industry as people return to their pre-pandemic exercise habits of going to the gym or outdoors — not their living rooms. 

While Min said that Zwift is still growing, it isn’t profitable and a restructuring of the business last year led to job cuts, amid a wave of layoffs and cost-cutting that’s hitting U.S. tech and e-commerce firms. The company didn’t confirm the number of positions that were eliminated, but said it currently employs between 500 and 600 people.

The company, based in Long Beach, won’t disclose information about subscriber activity. But data provided by fitness-tracking app Strava showed that the number of Zwifters on Strava grew at a faster pace between last year and 2019 than the number of overall cyclists on the app.

“The markets are choppy, demand is shaky at times and there’s just a lot of uncertainty in the world,” Min said. “But we have the luxury of seeing it through because we have plenty of capital.”