ClassPass, the seven-year-old fitness and wellness marketplace, announced last week that it has raised $285 million in Series E funding. The funding round was led by L Catterton and Apax Digital and included additional investment by current investor Temasek. ClassPass said in the announcement that it would use the new funding to expand its international presence and to focus on growing its corporate wellness sales program. According to TechCrunch, ClassPass has raised close to $550 million to date and is now valued at $1 billion, giving it the coveted status of unicorn.
Marc Magliacano, managing partner at L Cattertons Flagship Fund, and Daniel OKeefe, managing partner at Apax Digital, will join ClassPasss board of directors. L Catterton has worked with well-known fitness brands including Peloton, Hydrow and Tonal. Apax has experience with helping digital marketplaces and consumer subscription companies expand globally.
Since its launch in 2013, ClassPass has partnered with more than 30,000 boutique studios, gyms and wellness providers to offer more than 5 million classes and access to wellness providers. Members can take hot yoga, train in MMA, Crossfit or Tae Kwon Do, get facials, massages or acupuncture, check out a recreational circus school, or learn the aerial arts, among other classes, activities and services.
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ClassPass is currently available in 28 countries, including Austria, Denmark, France, Germany, Spain and the United Kingdom. In addition, over 1,000 employers use ClassPass as part of their corporate wellness programs.
Subscribers find fitness classes in 2,500 cities around the world via the ClassPass mobile app. Memberships range in price from $9 per month (4 credits to book up to one class) to $199 a month (130 credits to take up to 36 classes), after a one-month free trial. Extra perks include:
- Ability to roll over up to 10 credits per month
- Members can add extra credits every month
- Unlimited access to streaming workouts
- Personalized class recommendations
- Friend referral bonuses and invitations to classes
- Flexibility to change or cancel membership at any time
“We are motivated by the impact we’ve had on members and partners, including 100 million hours of workouts that have already been booked. This investment is a significant milestone that will further our mission to help people stay active and spend their time meaningfully,” said Payal Kadakia, founder and executive chairman, in the January 8 announcement.
ClassPass CEO Fritz Lanman commented on the funding round and the companys successful expansion.
“This fundraise is a reflection of our proven and sustained success in the U.S. and our rapid adoption internationally. In 18 months, we’ve scaled from 4 to 28 countries. Even in our recently launched European markets, our partners consistently call us their #1 driver of new customer reservations,” said Lanman. “Our goal is to be the brand of choice and clear leader in every country we enter. This investment will allow us to expand more rapidly within existing geographies, add more countries to our network, and scale our corporate program globally. Additionally, I am thrilled to welcome two new board members with incredible domain expertise in digital subscription businesses and the fitness industry more broadly.”
Since its launch, ClassPass has adapted its business model and pricing to better meet the needs of its members. In 2015, we first wrote about the company who was celebrating its two-year anniversary. At that time, ClassPass members got unlimited classes to participating boutique studios for between $79 and $99 a month with a maximum of three classes per month at any one studio. They had signed deals with more than 3,000 fitness studios in the U.S., Canada and the U.K. They were valued at more than $200 million in January 2015. My, how theyve grown!
Their current model is much more affordable and includes a far greater selection of locations, classes, activities and services. And, of course, the company has expanded internationally beyond Canada and the U.K. It is exciting to see a membership company with an idea start small, grow gradually and now expand even further globally. This is a great example of a successful subscription company that tried different models, tested pricing and offerings, and adapted until it found its sweet spot. A billion dollars sounds pretty sweet to us.