Few businesses have had to sweat out the pandemic like the fitness industry.
The US fitness market lost $20B in 2020, with 22% of fitness facilities closing permanently, and 1.5m fitness workers losing their job.
But Mindbody, which helps drive bookings for fitness studios, is doubling down on recovery. The firm acquired ClassPass for an undisclosed amount in an all-stock deal, and secured a $500m round of funding for the joint entity, per TechCrunch.
The move has been compared to Facebook’s acquisition of Instagram…
… because it brings together 2 complementary platforms:
- Mindbody offers software for studios to manage bookings, along with a consumer-facing app where users can book classes (think OpenTable for fitness studios)
- ClassPass offers a monthly subscription that gives subscribers access to a fixed number of classes across a range of studios
Joining forces will strengthen both products, and should lead to benefits for studios and consumers:
- Mindbody will give ClassPass subscribers access to a wider selection of studios
- ClassPass will help Mindbody’s customers fill more classes
But are people ready to return to the gym?
Mindbody and ClassPass claim their data shows pent-up demand for in-person fitness — and recent research suggests they’re on to something:
- In June, traffic at gyms recovered to 83% of pre-pandemic levels
- Meanwhile, searches for digital fitness have fallen since peaking in April 2020, per Jefferies Research
While the delta variant may impact traffic for the immediate future, the acquisition (and funding) will allow the new super app to thrive once consumers feel comfortable sweating in public again.