Mindbody to acquire ClassPass and announces $500 million strategic investment
Leading wellness experience platform, Mindbody, has agreed to acquire ClassPass, a monthly subscription service providing access to the world’s most extensive network of fitness and wellness experiences. This deal will bring two of the wellness industry’s most prominent leaders together, creating a one-stop shop for both business owners and consumers.
Mindbody’s intent to acquire ClassPass comes on the heels of recent research and data from both companies that proves consumers are getting back to in-person wellness experiences as studios reopen. 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 levels and ClassPass consumer usage is at 100% of pre-COVID usage for subscribers who have gone back to class.
Mindbody Chief Executive, Josh McCarter notes “this acquisition comes at a pivotal time for the wellness industry as it continues to rebound from COVID-19 related closures - and local and authentic experiences are more important to people than ever.
“Our companies share a singular focus on bringing wellness experiences to more people, in more places. By leveraging the best of both companies’ technology and expertise, we are more committed than ever to providing studios with best-in-class tools to help them grow and thrive, while also driving more consumers to their businesses.”
In conjunction with the acquisition, Mindbody has secured a strategic investment of $500 million from a group led by Sixth Street, a leading global investment firm. Prior Sixth Street investments include Airbnb, Datavant, Legends, MDLive, the San Antonio Spurs, Spotify and Sprinklr.
This investment, together with the continued support of Mindbody's majority investor and partner, Vista Equity Partners, will help further accelerate the company's growth and build upon the product innovations and investments that have been made over the course of the pandemic. Major milestones have included the creation of a fully integrated virtual platform that set business owners up for success in a hybrid world, enhancements to Mindbody's marketing automation tools to improve client acquisition and retention, and the introduction of Mindbody Capital, a product that will give small business owners access to financing to help them invest in and grow their business.
ClassPass, a leading global fitness sharing platform, offers business owners data-driven, machine learning-based SmartTools that help studios to manage excess inventory and market unsold spots at a revenue-maximising price. Studios on ClassPass typically experience a 30% increase in reservation volume and a 15 to 2% increase in revenue when they utilise SmartTools. 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.
ClassPass Chief Executive, Fritz Lanman advises “the ClassPass network includes many businesses already working with Mindbody. By combining our respective operations, we will 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.
“For consumers using our marketplace and professionals enrolled in the ClassPass Corporate Program, our goal is to create greater choice and flexibility in the experiences they can book.”
Best known for its SaaS platform that powers tens of thousands of wellness businesses around the globe, Mindbody has remained focused on its mission to help people lead happier, healthier lives by connecting the world to wellness. That leading B2B technology, combined with Mindbody’s existing consumer marketplace and the reach of ClassPass’s network will create the most extensive and integrated platform in the industry.
“As a customer and user of both Mindbody and ClassPass for several years, I know how impactful the combination of these two powerhouses will be on the industry as it regains momentum,” said Bryan Myers, President and CEO of [solidcore] boutique fitness.
The acquisition will be an all-stock deal at a non-disclosed price and will integrate both teams—with ClassPass continuing to operate its app and website. Upon closing of the deal, Lanman will serve as President of ClassPass and Mindbody Marketplace, working alongside McCarter and Mindbody’s executive team.
ClassPass founder Payal Kadakia adds “since the founding of ClassPass, our north star has always been how we can help people discover and seamlessly book soul-nurturing experiences.
“This acquisition will be a massive milestone for a female-founded company, and I am confident in the leadership of Josh McCarter and my long-time business partner Fritz Lanman to propel the business forward and continue to deliver a best-in-class experience for consumers and business owners alike.”
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