London, UK — Fitness subscription platform ClassPass has closed a $285 million Series E investment round, securing itself a billion-dollar valuation in the process.
The funding, which came from investors including L Catterton, Apax Digital and existing investor Temasek, follows a run of expansion by the company, which now operates in 28 countries. A move into the $50 billion-plus corporate wellness sector, with the signing of more than 1,000 leading employers onto its books has also helped to bolster recent growth.
The investment will enable ClassPass, which now has over 650 employees across five continents, to continue rapidly scaling its proprietary reservation and booking technology across the globe.
“This fundraise is a reflection of our proven and sustained success in the US and our rapid adoption internationally. In 18 months, we’ve scaled from 4 to 28 countries. Even in our recently launched European markets, our partners consistently call us their #1 driver of new customer reservations,” commented Fritz Lanman, ClassPass CEO.
“Our goal is to be the brand of choice and clear leader in every country we enter. This investment will allow us to expand more rapidly within existing geographies, add more countries to our network, and scale our corporate program globally. Additionally, I am thrilled to welcome two new board members with incredible domain expertise in digital subscription businesses and the fitness industry more broadly.”
As part of the deal, Marc Magliacano, Managing Partner at L Catterton’s Flagship Fund, and Daniel O’Keefe, Managing Partner at Apax Digital, will join the ClassPass Board of Directors.
L Catterton has deep experience working with leading fitness brands, including tech-enabled brands such as Peloton, Hydrow, and Tonal, as well as studio and fitness club brands, including Xponential Fitness, Equinox Holdings, Pure Barre, CorePower Yoga, Will’s Gyms (China), and BodyTech (Latin America). This has enabled the investment firm to witness firsthand how “ClassPass providers and members mutually benefit from the ClassPass relationship,” said Magliacano.
“ClassPass has continuously evolved its model to meet the changing needs of both partners and users. The ClassPass credits model, when combined with its A.I. 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,” he added.
Apax, meanwhile, has significant experience helping digital marketplace and consumer subscription businesses scale globally, which O’Keefe says will be leveraged to help ClassPass continue to accelerate its international traction.
With its newly acquired unicorn status, ClassPass joins a growing pool of billion-dollar valued wellness brands including Casper, Calm, Hims and Peloton. However, the label doesn’t guarantee success or profitability.
Last year at-home spinning phenomenon Peloton experienced $245.7 million in net losses, while DTC mattress brand Casper’s losses reached $64 million. Both businesses cite spend on expansion, marketing and international growth as contributing to these figures.
ClassPass is yet to offer any specifics on its profitability, but Lanman remains optimistic telling Fast Company recently that the goal is to build an enduring, generational public company, which can eventually IPO.