Mindbody, headquartered in San Luis Obispo, CA, said it has entered into an agreement to acquire ClassPass, the fitness membership subscription service.
The acquisition will be an all-stock deal at a non-disclosed price and will integrate both businesses.
In January 2020, ClassPass received a $285 million investment from L Catterton, Apax Digital and Temasek Holdings Pte and, at that time, the monthly subscription service for fitness and wellness experiences was reportedly valued at more than $1 billion, according to Bloomberg.
In 2019, Mindbody, a technology platform for booking exercise classes, was purchased for $1.9 billion by Vista Equity, which took the company private.
“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,” said Josh McCarter, CEO, Mindbody. “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.”
Upon closing of the deal, ClassPass CEO Fritz Lanman will serve as president of ClassPass and Mindbody Marketplace, working with McCarter and Mindbody’s executive team. Payal Kadakia, who founded ClassPass in 2013, will leave the company, she told Forbes.
In conjunction with the acquisition, Mindbody has secured a strategic investment of $500 million from a group led by Sixth Street, a global investment firm that has also invested in Airbnb, Datavant, Legends, MDLive, the San Antonio Spurs, Spotify, and Sprinklr.
This investment, with the support from Mindbody’s majority investor and partner Vista Equity Partners, will help accelerate the company’s growth and build on product innovation and investments made over the course of the pandemic, according to Mindbody. Those innovations included the creation of an integrated virtual platform that enhances its marketing automation tools and the introduction of Mindbody Capital, a product created to give small business owners access to financing to help them invest in and grow their business.
“Since the founding of ClassPass, our north star has always been how we can help people discover and seamlessly book soul-nurturing experiences,” said Kadakia. “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.”
“The ClassPass network includes many businesses already working with Mindbody,” Lanman said. “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.”
Photo courtesy ClassPass