Mindbody acquires ClassPass amid a US$500M investment to advance growth
15 Oct 2021 --- US-based Mindbody, a wellness experience technology platform, has secured a US$500 million investment and is acquiring ClassPass, a monthly subscription service that provides access to a network of fitness and wellness experiences.
The funding comes from Sixth Street, a global investment firm, and it will support further growth and product development for Mindbody. In addition, the acquisition will create a one-stop-shop for both business owners and consumers. The attainment of ClassPass is an all-stock deal at a non-disclosed price.
“This acquisition and investment come at a pivotal time as the wellness industry works to rebound – after COVID-19 closures – and consumers realize that wellness is more important than ever, actively seeking local and authentic experiences,” Josh McCarter, Mindbody CEO, tells PersonalCareInsights.
The wellness industry is poised for a massive recovery, and together with ClassPass, we can better serve the industry and help wellness businesses get back on their feet, he notes.
“The acquisition serves as the bridge between consumers and wellness businesses. Wellness businesses will gain access to a wider consumer audience while consumers will have access to a wider variety of wellness experiences to choose from.”
Additionally, the investment from Sixth Street combined with the continued support of Vista Equity Partners will allow us to continue to support business owners in the wellness industry, McCarter continues.
The acquisition will integrate both teams – with ClassPass continuing to operate its app and website.
The acquisition follows research and data from both companies that shows consumers are getting back to in-person wellness experiences as studios reopen.
Enhancing consumer experience
ClassPass offers data-driven, machine learning-based SmartTools for business owners that help studios manage excess inventory and market unsold spots at a revenue-maximizing price.
Mindbody’s intent to acquire ClassPass follows research and data from both companies that show consumers are getting back to in-person wellness experiences as studios reopen.
Their research found that nearly 80% of consumers feel wellness is more important than ever.
Additionally, several markets that have fully reopened are seeing bookings on the Mindbody platform rebounding to pre-COVID-19 levels, and ClassPass consumer usage is at 110% of pre-COVID-19 use for subscribers who have gone back to class.
Studios on ClassPass typically experience a 30% increase in reservation volume and a 15% to 20% increase in revenue when utilizing SmartTools, the company says.
Additionally, 50% of ClassPass members are new to boutique fitness upon joining, and 80% visit a new studio for the first time using the platform.
“As a long-time partner to Mindbody, we have seen ClassPass grow and evolve its consumer marketplace over the years. Together, Mindbody and ClassPass will help bring more people into wellness studios and better support the businesses on the Mindbody platform in their efforts to reach wellness seekers,” McCarter explains.
The investment will accelerate MindBody’s growth and product development.
“When we combine our respective operations, we can create more seamless integrations and unlock new revenue opportunities for business owners using both services, while continuing to support all fitness, salon and spa businesses who choose to work with Mindbody or ClassPass.”
Virtual wellness platform
Enhancements have been made to Mindbody’s marketing automation tools to improve client acquisition and retention.
“We intend to put Sixth Street’s investment toward the continued development of our offerings, including further development of our fully integrated virtual wellness platform, enhancements to Mindbody’s marketing automation tools to improve client acquisition and retention as businesses get back on their feet,” details McCarter.
Additionally, we intend to put some of the investment toward our newest offering, Mindbody Capital, explains McCarter.
“Mindbody Capital is specifically created for the wellness industry and offers our customers a cash advance, not a loan, which eliminates much of the bias women and business people of color disproportionately face when compared to traditional financing options.”
“This offering is designed to give small business owners in the wellness industry access to financing to help them invest in and grow their business,” concludes McCarter.
By Nicole Kerr
