The new investment, led by L Catterton and Apax Digital, values ClassPass at $1 billion, TechCrunch reported.
ClassPass members get “credits” to sign up for classes or other wellness experiences like massages and spa treatments at their choice of more than 30,000 studios. The company said in a press release that it will use the new investment to further grow its service.
“We are motivated by the impact we’ve had on members and partners, including 100 million hours of workouts that have already been booked,” said Payal Kadakia, the company’s cofounder and executive chairman. “This investment is a significant milestone that will further our mission to help people stay active and spend their time meaningfully.”
Kadakia cofounded ClassPass in 2013. CEO Fritz Lanman said the company has rapidly expanded recently, from four to 28 countries in the past 18 months. In addition to adding new regions to the service, Lanman said ClassPass will “scale [its] corporate program globally.” The company already has more than 1,000 employers signed up with its corporate wellness program.
“Our goal is to be the brand of choice and clear leader in every country we enter,” Lanman said.
The funding is a sign that investors aren’t wary of fitness unicorns, even after Peloton’s stock has faltered in the wake of its controversial ad that critics called sexist. While its stock price hasn’t again reached a peak of more than $36 that it hit in early December, it has turned up in the past couple of weeks and hasn’t fallen as low as it did in its first few weeks of trading after Peloton’s IPO in September.
Peloton hit $1 billion in valuation in 2017. Today, its market cap is more than $8.3 billion. For comparison, gym chain Planet Fitness is valued at $6.2 billion.
L Catterton, one of the new ClassPass investors, has worked with other fitness brands like Peloton and studios like Equinox and Pure Barre.
Marc Magliacano, the managing partner at L Catterton’s flagship fund, said in a press release that the firm has “seen firsthand how ClassPass providers and members mutually benefit from the ClassPass relationship.”
“ClassPass has continuously evolved its model to meet the changing needs of both partners and users,” he said. “The ClassPass credits model, when combined with AI tools, allows studios significant flexibility in monetizing their excess inventory and generates more revenue for studios than any other aggregator. We are confident that ClassPass is poised to grow into one of the most prominent wellness brands of the new decade and we couldn’t be more excited to continue to partner with Fritz and his team.”