ClassPass

ClassPass
Industry Physical fitness
Founded June 1, 2013 (June 1, 2013)
Founders Payal Kadakia
Mary Biggins
Headquarters New York City, New York, U.S.
Area served
 Worldwide
Key people
 Fritz Lanman, CEO
Payal Kadakia, Chairman
Number of employees
 200+[1]
Website classpass.com

ClassPass Inc., based in New York City, provides access to yoga, strength training, barre, martial arts, pilates, boxing, and indoor cycling classes, as well as use of health clubs via its flat-rate monthly subscription billing service.[2][3] Led by CEO and major investor Fritz Lanman since March 2017, ClassPass is the world's largest health club aggregator and has partnerships with 8,500 health clubs in 49 cities worldwide. The company receives a discounted cost from health clubs in exchange for providing the clubs with increased usage.

As of its latest financing in June 2017, the company was valued at $470 million.[4]

History

In 2011, after spending over an hour searching online for an open ballet class in New York City, 28-year old Payal Kadakia, an Indian American graduate of the Massachusetts Institute of Technology and employee of Warner Music Group, had the idea to create a search engine and reservation system for fitness classes.[5][6][7] In September 2012, Mary Biggins was hired.[8] In June 2012, Kadakia released Classtivity to the public, with Sanjiv Sanghavi.[8][9] In January 2014, Classtivity was rebranded as ClassPass.[10] Sanghavi left in January 2014.[11]

An earlier version of the company's product was intended to sell a better registration system to fitness studios but this did not receive much interest.[12] After participating in the TechStars accelerator, the company switched to offering a package deal where users could pay $49 for 10 classes in a year, a model that Kadakia likened to Groupon. However, users of the service wanted to take more than 10 classes per year, so the company switched to offering a 10-class subscription service for $99 per month.[13] The company enforces a cancellation fee of $20 for missing classes.[14]

By April 2016, the company had booked over 17 million fitness reservations. The company also added additional pricing tiers such as 3 or 5 classes per month.[15]

In March 2017, Payal Kadakia swapped roles with Fritz Lanman, with Lanman becoming CEO and Kadakia becoming Executive Chairman.[16]

By June 2017, the company had booked 35 million reservations.[17]

In August 2017, the company announced expansion to New Orleans, Pittsburgh, San Antonio, Cincinnati, Calgary, Honolulu, Indianapolis, Milwaukee, Riverside, California, and Salt Lake City.[18][19]

By December 2017, the company had booked 45 million reservations.[20][21]

In March 2018, ClassPass launched live-streamed fitness classes for $15 per month[22].[23][24]

In 2017, the company was ranked #2 on the Deloitte Fast 500 North America list.[25]

Financing

ClassPass received seed funding of $2 million in March 2014, then attracted $12 million in Series A round funding from entrepreneur Fritz Lanman in September 2014. In 2015, it received $40 million of Series B funding from General Catalyst and Thrive Capital.[8] The company was valued as over $200 million.[26] Classpass received an additional $30 million of funding in November 2015 led by Google Ventures.[27] ClassPass announced a $70 million Series C led by Temasek Holdings in May 2017 that valued the company at $470 million.[17][4]

Criticism

Classpass has been criticized for undercutting the business model of the health clubs that it relies on, with an article in The New York Times describing it as a "middleman" between consumers and health clubs, and arguing that a "power imbalance" exists between the health clubs owners and ClassPass which mirrors the relationship with other digital intermediary services such as Amazon.com and Uber.[28]

A perhaps unintended consequence of the ClassPass business model is that in Washington, DC, users do not have to pay sales tax for the subscription as they would have to if they were paying directly for classes or memberships at the individual health clubs.[29]

See also

References

  1. ↑ Dahlberg, Nancy (January 25, 2016). "Tech Talk: From ClassPass to MealPass, from Big Apple to Magic City". Miami Herald.
  2. ↑ Lodi, Hafsa (December 31, 2015). "The pros and cons of fitness-pass packages". Thenational.ae.
  3. ↑ Shontell, Alyson (July 31, 2014). "How Getting Mugged And Maced Helped A World-Class Dancer Save Her Struggling Startup". Business Insider.
  4. 1 2 Chernova, Yuliya (June 16, 2017). "ClassPass Taps $70 Million in 'Down' Round". The Wall Street Journal. (subscription required)
  5. ↑ Marikar, Sheila (November 3, 2014). "How one fitness entrepreneur raised $14 million". Fortune.
  6. ↑ Maltby, Anna (January 27, 2015). "This Company Will Get You Into Unlimited Fitness Classes". Fast Company.
  7. ↑ Arata, Emily (December 15, 2015). "I Want Your Job: Payal Kadakia, Cofounder And CEO Of ClassPass". Elite Daily.
  8. 1 2 3 Crook, Jordan (January 15, 2015). "Classpass Is In Session With $40 Million In Series B". TechCrunch.
  9. ↑ "Payal Kadakia: How to price your product to scale | Masters of Scale podcast". WaitWhat. Retrieved 2018-03-20.
  10. ↑ Carson, Biz (October 20, 2015). "How this world-class dancer went from failing twice to a $30 dollar fitness empire". Business Insider.
  11. ↑ Sorvino, Chloe (June 17, 2016). "Why Failing Twice Helped ClassPass's Payal Kadakia Build A $50 Million (And Growing) Fortune". Forbes.
  12. ↑ Shontell, Alyson (July 31, 2014). "How Getting Mugged And Maced Helped A World-Class Dancer Save Her Struggling Startup". Business Insider.
  13. ↑ Altrogge, Stephen (17 November 2015). "Monthly Lifestyle Subscriptions Are a Thing With Companies Like Wonderush". Snapmunk.
  14. ↑ Plante, Stephie (January 20, 2015). "ClassPass: Is the Fitness World's Latest Obsession Worth $54 Million?". Racked.com.
  15. ↑ Crook, Jordan (April 13, 2016). "Classpass rolls out new pricing structure". Techcrunch.
  16. ↑ Crook, Jordan (March 17, 2017). "Fritz Lanman takes CEO role at ClassPass as founder Payal Kadakia steps in as Chairman". TechCrunch.
  17. 1 2 Crook, Jordan (June 16, 2017). "ClassPass secures $70 million Series C led by Temasek". TechCrunch.
  18. ↑ "ClassPass Announces Plans for North America Expansion Leading into 2018" (Press release). Business Wire. August 22, 2017.
  19. ↑ Abrams, Margaret (August 24, 2017). "ClassPass Is Coming Soon to a City Near You". The Observer.
  20. ↑ "ClassPass app opening office in Missoula, plans to hire 50 employees". Fox News. December 27, 2017.
  21. ↑ "ClassPass | Estée Stories Blog | esteelauder.com". Estée Lauder Australia Official Site. Retrieved 2018-06-20.
  22. ↑ "ClassPass Live launches on-demand workouts from home – TechCrunch". techcrunch.com. Retrieved 2018-05-15.
  23. ↑ Sorkin, Andrew Ross (January 26, 2018). "Live-Streaming Fitness: ClassPass's New Product". CNBC.
  24. ↑ Carman, Ashley (December 6, 2017). "ClassPass will let you live stream fitness classes at home for $15 a month". The Verge.
  25. ↑ "Top five 2017 North America Fast 500 winners". Deloitte.
  26. ↑ Chernova, Yuliya (March 12, 2015). "ClassPass, Valued at More Than $200M, Taps Into Gym Craze". The Wall Street Journal. (subscription required)
  27. ↑ Crook, Jordan (11 November 2015). "Confirmed, ClassPass Raises $30 Million Series C From Google Ventures". TechCrunch.
  28. ↑ Wortham, Jenna (March 9, 2015). "ClassPass and the Joy and Guilt of the Digital Middleman Economy". The New York Times Magazine. (subscription required)
  29. ↑ Hallett, Vicky (October 7, 2014). "ClassPass lets you take as many fitness classes as you want all over D.C. for $99 a month". The Washington Post.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.