What does ClassPass need the money for?

[Hoofy]

They don't actually own any gyms? Or am I missing something. Obvs marketing costs, office rental... but $1bn??

https://www.welltodoglobal.com/classpass-secures-u...

[akirk]

global expansion - taking over the world
so, more offices / staff / etc.
presumably they have software and platform costs - and also people costs in building relationships with a) the gyms etc. but also b) businesses who use them - they are moving more into well-being (according to the article) which could suggest provision of more than just access to classes...

also, valuations / money raised will not always be directly linked to need, but might reflect competing interests from investors etc.
I think there is a considerable enthusiasm in investment to find the 'unicorns' the theory being that you might invest at a high current valuation, but the speed and scale of return will be fast and significant - if they are seen as that in their sector then they will get investment based on an emotional response as much as proper DD

[Hoofy]

akirk said:

global expansion - taking over the world
so, more offices / staff / etc.
presumably they have software and platform costs - and also people costs in building relationships with a) the gyms etc. but also b) businesses who use them - they are moving more into well-being (according to the article) which could suggest provision of more than just access to classes...

also, valuations / money raised will not always be directly linked to need, but might reflect competing interests from investors etc.
I think there is a considerable enthusiasm in investment to find the 'unicorns' the theory being that you might invest at a high current valuation, but the speed and scale of return will be fast and significant - if they are seen as that in their sector then they will get investment based on an emotional response as much as proper DD

Thanks. I get that it costs; I can't see why it costs that much if they are using the same software etc. I guess they're growing beyond their gym class access model?

[akirk]

Hoofy said:

Thanks. I get that it costs; I can't see why it costs that much if they are using the same software etc. I guess they're growing beyond their gym class access model?

I don't know much about them, but as I understand it the gym class access model has limited scope for increasing value - you can increase value through adding more classes / more punters - but I assume that you also risk losing punters directly to the gym once they have been linked - it seems that they see a larger value in widening their scope - hence well-being / corporate / etc.

ultimately their value will be linked to how many people they 'own' through their system - so by investing heavily in market share acquisition they also see their value go up - if they are then agile in what they do they can keep moving that captured market from idea to new idea - and with diet and fitness and well-being industries being very valuable they inherit a part of that value.

TLDR - grab market share with simple concept - leverage into access to more income

[Hoofy]

akirk said:

Hoofy said:

Thanks. I get that it costs; I can't see why it costs that much if they are using the same software etc. I guess they're growing beyond their gym class access model?

I don't know much about them, but as I understand it the gym class access model has limited scope for increasing value - you can increase value through adding more classes / more punters - but I assume that you also risk losing punters directly to the gym once they have been linked - it seems that they see a larger value in widening their scope - hence well-being / corporate / etc.

ultimately their value will be linked to how many people they 'own' through their system - so by investing heavily in market share acquisition they also see their value go up - if they are then agile in what they do they can keep moving that captured market from idea to new idea - and with diet and fitness and well-being industries being very valuable they inherit a part of that value.

TLDR - grab market share with simple concept - leverage into access to more income

Yes, I tend to agree. One of the reasons I don't use CP is because I don't want the gym I am visiting constantly harrassing me to join.