MAGIC AI, a London startup selling AI-powered fitness mirrors with holographic coaches, closed an $11 million Series B round announced September 23–24 co-led by Beringea and IW Capital. The raise brings total funding to about $20 million and arrives as the company pushes into the U.S. market with a hardware-subscription model that burned its better-funded predecessors.
Active Partners, PXN Group, Accelerate Ventures, Doorway and Ventures Together also participated in the round, according to a Beringea press release. The company disclosed 18,000+ U.S. members spanning all 50 states and 342% annual growth alongside the funding news — a pace that, if sustained, would put it on track to surpass some early milestones set by the connected fitness players who came before.
The timing is notable. Mirror, which Lululemon acquired in a splashy 2020 deal, ceased selling hardware in Q3 2023 after booking $442.7 million in post-tax impairment charges, according to the company's fiscal 2023 10-K filing. Tonal, once valued at $1.9 billion, pursued a down-round in 2023 at approximately $500 million, Fortune reported. Both companies bet heavily on a pandemic fitness boom that didn't outlast the reopening of gyms.
MAGIC AI's 59-inch wall-mounted display uses an embedded camera and computer vision to count reps, correct form and suggest weight adjustments in real time. The system runs proprietary ReflectAI coaching software that powers more than 1,000 exercises and has logged 500,000 workouts, accumulating roughly 150,000 hours of training data, according to IW Capital. Celebrity trainers including footballer Jesse Lingard and cricketer Sir Alastair Cook appear as holographic instructors, a feature that plays particularly well in the U.K. market.
The mirror carries a promotional price of $1,499, down from a list price of $1,999, with an optional MAGIC+ subscription starting at $24.92 monthly, according to the company's U.S. product page. That pricing undercuts Tonal, which launched at $2,995 plus $49 monthly, though direct comparisons are imperfect given different feature sets.
CEO Varun Bhanot wrote on LinkedIn that the capital will accelerate U.S. expansion and deepen the ReflectAI data layer. "This round is about two things: America will make up most of our business by next year, and going far deeper into the data layer," Bhanot said in the Beringea release. The company hired Kevin Cornils, Peloton's former chief commercial officer and managing director of international, to lead the U.S. push, Dealroom reported. Athletech News, citing The Times, confirmed Cornils is also a shareholder.
The Peloton connection isn't incidental. MAGIC AI is attempting what Peloton achieved in cycling and rowing — building a recurring revenue business atop premium hardware — but in a category where others faltered. Bhanot disclosed on LinkedIn in August that the company hit $19.5 million in trailing twelve-month gross revenue with 100% year-over-year growth, 18 full-time employees and approximately $1.33 million in revenue per employee. A separate post revealed January revenue of $3.4 million with $306,000 in EBITDA, marking the third consecutive profitable month.
Those unit economics, if they hold, suggest a different trajectory than the cash-burn models that defined the first wave of connected fitness. The company has also pursued retail distribution aggressively in its home market, rolling out to 37 Currys stores and John Lewis locations in Oxford Street, Liverpool, Cheadle and Glasgow between August and October, according to the company's LinkedIn.
Active Partners, known for backing Soho House, Rapha and LEON, joined the round alongside growth investor PXN Group, TechFundingNews reported. IW Capital previously led a roughly $5 million round in November 2024, and a €2.3 million seed led by Fasanara Capital closed in July 2023, EU-Startups reported.
Emma Biasiolo, investment director at Beringea, said in the release that "MAGIC AI is one of those businesses where the momentum was immediately obvious to us — customers love the product." The company, founded in 2021, won a King's Award for Enterprise in Innovation in May and appeared on TIME's Best Inventions list in 2024.
Whether MAGIC AI can avoid the fate of Mirror and Tonal may depend less on technology than on something more elusive: convincing consumers that a $1,500 mirror and monthly subscription fee are worth it when the local gym membership costs a fraction of that. The company is betting its AI coaching and form correction offer enough value to justify the premium. Investors, at least for now, seem willing to see if American consumers agree.
