Mindbody acquires ClassPass, combining two fitness-focused software makers challenged by the pandemic
as it laid off or furloughed half of its staff in April 2020. In an interview, Fritz Lanman, one of the company’s first investors and formerly its executive chairman, who replaced Kadakia as CEO in 2017, said the company had deliberately frozen sales in the early weeks of the pandemic. He claimed the business has since bounced back, without providing specific sales figures, but noted that ClassPass had “hundreds of thousands of users,” with 90% paying for recurring revenue plans.
ClassPass previously raised at least $280 million from private investors, according to data from PitchBook, including a $285 million Series E in January 2020 that valued the company at $1 billion in exchange for giving up more than one-quarter of its equity. Given the pandemic’s effect on its business, it would seem a surprise that ClassPass sold for more than that valuation. But in a written statement, Lanman implied the company could have exceeded it.
Investors in ClassPass are remaining shareholders of the new combined company under Mindbody, Lanman also claims. “No ClassPass investor is cashing out,” he told. “Apax Partners, L Catterton, Temasek, Google Ventures [now known as GV], General Catalyst, Thrive [Capital]. All these top VCs that ClassPass has are endorsing this deal, effectively, by saying, ‘Hey, we want to own equity in the combined business.
The next unanswered question: how Vista Equity Partners values Mindbody, the business founded in 2000, which it acquired for $1.9 billion
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