Studio fitness and wellness platform ClassPass has raised $285 million in funding from investors in Peloton and Equinox, making the company the latest female-founded startup to achieve a $1 billion unicorn valuation.
Founded in 2013 by Payal Kadakia, who now serves as executive chairman, and currently led by CEO Fritz Lanman, ClassPass raised the mega-round to accelerate its international expansion, grow its corporate wellness offering, and continue adding wellness activities, like facials and massages, to its existing studio fitness markets. “This is more than we sought out to raise. We were oversubscribed,” says Lanman. “But we brought it in from two great partners to finish our global footprint.”
This Series E round was led by L Catterton and Apax Digital, with participation from existing investor Temasek. L Catterton is known for its investments in Equinox Holdings and Peloton and as the former owner of Xponential Brands, which includes Pure Barre. “We are confident that ClassPass is poised to grow into one of the most prominent wellness brands of the new decade,” Marc Magliacano, managing partner at L Catterton’s Flagship Fund, said in a statement. Magliacano will join ClassPass’s board of directors, as will Apax Digital managing partner Daniel O’Keefe.
After a recent expansion throughout Europe, ClassPass operates in 28 countries. In the past year, the company has signed 1,000 employers, including Etsy, Facebook, Gatorade, Glossier, Google, Morgan Stanley, Southwest Airlines, and Under Armour, to its corporate wellness program, an alternative to employer-subsidized gym memberships.
ClassPass has struggled to land on a sustainable business model. When it launched in 2013, the startup offered a $99-a-month membership that provided access to an unlimited number of fitness classes in New York. The company repeatedly raised prices before introducing a credits-based system, which it overhauled last year to incorporate fluctuating class prices based on the studio’s availability and demand. Consumers now pay between $19 and $199 a month for between 10 and 130 credits that can be redeemed for classes.
Lanman and Kadakia say that the company has cleared those hurdles, and that ClassPass is growing its category and potential markets. “Markets that three or four years ago we didn’t think would work, like Manila, Bangkok, or Kuala Lumpur, now have the best studio fitness partners we’ve seen,” Lanman says. To continue its international expansion, ClassPass will look to add more cities throughout Europe and to enter central and South America.
The unicorn valuation follows another recent trend, too. Kadakia—like Rent the Runway’s Jennifer Hyman when her company reached this milestone last year—is nearly nine months pregnant. “We’re sending the right message, making sure people understand it’s possible,” Kadakia says of the timing.
“We’re excited and proud as a female-founded company,” Lanman adds, “to achieve this valuation milestone, and to be the first of the 2020 decade.”
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