Peloton spent $47.4 million on a company that makes its bikes, tackling one of its biggest risks

• Peloton released its first set of public quarterly results on Tuesday after the company went public in September.
• In an accompanying letter to shareholders, Peloton announced that during the quarter it acquired one of its Taiwanese bike manufacturing partners for $47.4 million.
• This is an important acquisition for Peloton as it had previously said that having limited control over its third-party manufacturing partners is a big risk for the company. Without full control, it is vulnerable to price increases or delays, for example.
• By bringing this in-house, it will have full control of this.
• A spokesperson did not immediately respond to Business Insider's request for comment on what percentage of its bikes are produced by this particular manufacturer.
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Peloton filed its first quarterly results on Tuesday after becoming a publicly listed company earlier this year.

In an accompanying letter to shareholders, the company outlined some of its biggest announcements during the quarter, including a $47.4 million acquisition of one of its bike manufacturing partners in Taiwan.

"We are excited to share that in October we completed the acquisition of one of our longtime, Taiwan-based bike manufacturing partners, Tonic Fitness Technology, Inc," Peloton wrote. "We believe that having greater control over our supply chain will enable us to strengthen and scale our production capabilities, increase innovation, and allow us to continue to deliver the highest quality connected fitness products in the market."

Tonic, which has partnered with Peloton since 2013, isn't Peloton's only manufacturer - a spokesperson for Peloton did not immediately respond to Business Insider's request for comment on what percentage of its bikes it produces - however, this acquisition is an important step toward reducing some of the risks associated with being at the mercy of third-party manufacturing companies.

Peloton has been upfront about these risks in its paperwork recently released for its IPO.

Firstly, it said that by having limited control over its suppliers and manufacturers, it means that if something does go wrong - delays, shortages of materials, etc. it's out of its own hands. Moreover, it's more vulnerable to price increases.

Secondly, by relying on a limited number of manufacturers (all of whom are based in Taiwan) it is at bigger risk if something does go wrong. It would not only be expensive to find a replacement but it would likely cause big delays, it said.