ClassPass Founder Payal Kadakia To Step Down As CEO

NEW York, United States — ClassPass Founder Payal Kadakia is stepping down from her role as CEO to focus on the company’s innovation and branding.

Serving as the new Executive Chairman, she will continue as the driving force of the business, while Fritz Lanman, former Executive Chairman, takes over as Chief Executive.

Having recently led both the company’s Seed and Series A rounds of financing, before formally joining the executive team in 2015, Lanman has a long-standing partnership with ClassPass. According to Business Insider the entrepreneur and angel investor has been acting as the company’s CEO, albeit unofficially, for some time.

“I had started to take more of an operating role, and this was a title mismatch,” Lanman told Fortune. “The CEO was supposed to be the operator, and the executive chairman was supposed to be the person handling more key strategic projects. So we just changed titles because we organically evolved to this place.”

Despite his prior experience, Lanman has a difficult task on his hands. The swap comes at a time when ClassPass is still struggling to find its footing, having recently scrapped its original unlimited class model as well as raising its prices, eliciting strong criticism from customers.

In a bid to boost sustainability and retain users, earlier this year the company doubled-down on community through the integration of a range of new social features. In addition, a newly launched option for users to visit studios more than the previous limit of two or three times per month, has reportedly helped to boost subscriber growth to record levels.

According to Lanman, the business is now in a place where it has sustainable gross margins. But, with plans to expand the platform into adjacent fitness categories like sports, gyms, outdoor workouts and on-demand videos, he still has his work cut out.