Last week, lululemon acquired the home fitness startup Mirror for $500 million. Mirror sells you the equivalent of a beautiful, giant iPad that hangs on your wall for $1,495. Then, if you pay a $39 monthly subscription, you can use a mobile app to turn the Mirror into a fitness class. Both on-demand and live classes are available for everything from yoga to boxing. 

You may be wondering why a company that makes yoga pants is buying a company that makes smart mirrors and fitness videos. 

Instead of looking at it that way, consider a different frame. Both companies target the same customer: affluent millennials who like to workout and stare at themselves in a mirror. 

Kidding aside, this acquisition makes a lot of sense for lululemon. It goes deeper than simply marketing to the same demographic too. A few reasons why lululemon scooped up Mirror:

• Added a recurring revenue stream (something they didn’t have before)
• Opportunity to cross-sell Mirror to their existing customers
• Earn a spot in the connected home with a new hardware product