Wellness booking platform Mindbody is acquiring subscription-based fitness marketplace ClassPass.
Details: Terms of the all-stock deal were not disclosed. Part of the deal, Mindbody added $500M in new funding led by global investment firm Sixth Street.
What they’re saying:
“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.” — Mindbody CEO Josh McCarter
“By combining our respective operations, we will create more seamless integrations and unlock new revenue opportunities for business owners using both services.” — Fritz Lanman, ClassPass CEO
How we got here: The pandemic’s impact on gym and studios led to revenue declines and layoffs at both companies. Lingering shutdowns and uncertainty about the future of brick-and-mortar fitness prompted Mindbody and ClassPass to explore a merger earlier this year.
For context: Pre-COVID, Mindbody served some 60K health and wellness businesses. In 2018, Vista Equity Partners acquired the company for $1.9B. Meanwhile, after a number of pivots, ClassPass reached a $1B valuation in early 2020, raising $285M in Series E funding.
From the podcast:
- Our interview with Mindbody CEO Josh McCarter
- ClassPass CEO Fritz Lanman on the Fitt Insider podcast
The two companies are no stranger to each other. ClassPass uses Mindbody’s API to list studios. In recent years, as Mindbody evolved from an enterprise software into a consumer brand, it acquired dynamic pricing/inventory management companies, further encroaching on ClassPass’s domain.
Looking ahead. A result of this mega-merger, studio owners and other software providers will be forced to reassess where they fit in.