ClassPass

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ClassPass
IndustryPhysical fitness
FoundedJune 1, 2013; 8 years ago (June 1, 2013)
FoundersPayal Kadakia
Mary Biggins
Headquarters
New York City, New York
,
United States
Area served
Worldwide
Key people
Fritz Lanman, CEO
Payal Kadakia, Chairwoman
Number of employees
300[1]
Websiteclasspass.com

ClassPass Inc. is an American company which provides access to different fitness classes such as 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] ClassPass has been led by CEO and major investor Fritz Lanman since March 2017, and is the world's largest health club aggregator by number of club partnerships, with over 30,000 health clubs in 28 countries.[4] ClassPass has locations in the United States, Australia, Brazil, Canada, Europe, New Zealand, India, Thailand, Singapore, United Arab Emirates, Hong Kong, Indonesia, and Malaysia. As of its latest financing in January 2020, the company was valued at $1 billion.[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, realised she was tired of corporate life and allocated herself fourteen days to come up with an idea for her very own company. During this time, she 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.[3] 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.[12] The company enforces a cancellation fee of $20 for missing classes.[13]

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.[14]

In March 2017, Payal Kadakia swapped roles with Fritz Lanman, with Lanman becoming CEO and Kadakia becoming Executive Chairman.[15]

By June 2017, the company had booked 35 million reservations [16] and by December 2017, the company had booked 45 million reservations.[17][18]

In August 2017, the company announced expansion to New Orleans, Pittsburgh, San Antonio, Cincinnati, Calgary, Honolulu, Indianapolis, Milwaukee, Riverside, California, and Salt Lake City.[19][20]

In 2017, the company was ranked #2 on the Deloitte Fast 500 North America list.[21]

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

In October 2018, ClassPass was launched in Thailand.[25]

In January 2019, Classpass acquired Guavapass. All Guavapass accounts transferred to ClassPass membership.[citation needed]

When gyms were ordered to shut during the COVID-19 pandemic in 2020, ClassPass started to stream classes online. Despite the popularity of this service, the company lost 95% of revenue and halved its staff.[26]

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.[27] Classpass received an additional $30 million of funding in November 2015 led by Google Ventures.[28] ClassPass announced a $70 million Series C led by Temasek Holdings in May 2017 that valued the company at $470 million.[16][29] In July 2018, Membership-driven fitness network ClassPass secures US$85M led by Temasek to expand into Asia.[30] [31] In early 2019, there were rumours the company was in the process of an IPO. It raised $285 million in funding during the beginning of 2020 that put the company's valuation at $1 billion.[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.[32] The service has accounted for lower margins at some gyms where owners limit the number of members "to prevent being cannibalized".[33]

See also[]

  • Indians in the New York City metropolitan region
  • Tech companies in the New York metropolitan area

References[]

  1. ^ "ClassPass Meet the Team". December 27, 2018.
  2. ^ Lodi, Hafsa (December 31, 2015). "The pros and cons of fitness-pass packages". Thenational.ae.
  3. ^ Jump up to: a b Shontell, Alyson (July 31, 2014). "How Getting Mugged And Maced Helped A World-Class Dancer Save Her Struggling Startup". Business Insider.
  4. ^ Jump up to: a b c "Fitness startup ClassPass is now a unicorn". CNN.
  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. ^ Jump up to: a b c 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. ^ Altrogge, Stephen (17 November 2015). "Monthly Lifestyle Subscriptions Are a Thing With Companies Like Wonderush". Snapmunk.
  13. ^ Plante, Stephie (January 20, 2015). "ClassPass: Is the Fitness World's Latest Obsession Worth $54 Million?". Racked.com.
  14. ^ Crook, Jordan (April 13, 2016). "Classpass rolls out new pricing structure". Techcrunch.
  15. ^ Crook, Jordan (March 17, 2017). "Fritz Lanman takes CEO role at ClassPass as founder Payal Kadakia steps in as Chairman". TechCrunch.
  16. ^ Jump up to: a b Crook, Jordan (June 16, 2017). "ClassPass secures $70 million Series C led by Temasek". TechCrunch.
  17. ^ "ClassPass app opening office in Missoula, plans to hire 50 employees". Fox News. December 27, 2017.
  18. ^ "ClassPass | Estée Stories Blog | esteelauder.com". Estée Lauder Australia Official Site. Retrieved 2018-06-20.
  19. ^ "ClassPass Announces Plans for North America Expansion Leading into 2018" (Press release). Business Wire. August 22, 2017.
  20. ^ Abrams, Margaret (August 24, 2017). "ClassPass Is Coming Soon to a City Near You". Observer.
  21. ^ "Top five 2017 North America Fast 500 winners". Deloitte.
  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. ^ "Gym membership scheme opens in Thailand - The Nation". The Nation. Retrieved 2018-10-26.
  26. ^ Feiner, Lauren (2020-04-02). "ClassPass reduces staff by more than half as social distancing drives fitness home". CNBC. Retrieved 2020-05-15.
  27. ^ Chernova, Yuliya (March 12, 2015). "ClassPass, Valued at More Than $200M, Taps Into Gym Craze". The Wall Street Journal.(subscription required)
  28. ^ Crook, Jordan (11 November 2015). "Confirmed, ClassPass Raises $30 Million Series C From Google Ventures". TechCrunch.
  29. ^ Chernova, Yuliya (June 16, 2017). "ClassPass Taps $70 Million in 'Down' Round". The Wall Street Journal.(subscription required)
  30. ^ "ClassPass Announces Free Standalone App for Guided Audio Workouts with the Launch of ClassPass Go". fastcompany.com. 2018-07-31.
  31. ^ "ClassPass Inc". mg21.com. 2021-07-14.
  32. ^ Wortham, Jenna (March 9, 2015). "ClassPass and the Joy and Guilt of the Digital Middleman Economy". The New York Times Magazine.(subscription required)
  33. ^ "Fitness subscription service ClassPass brings new business to studios, but at what cost?". The Globe and Mail.

External links[]

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