Linear #028: The Story of Mindbody, 20 Bessemer Investment Memos, Guide To Raising Capital
Linear #028: The Story of Mindbody, 20 Bessemer Investment Memos, Guide To Raising Capital
One vSaaS breakdown. One biz story. One 'how to'. In your inbox once a week.
One Vertical SaaS Breakdown:
The Story Of Mindbody
A software platform for Yoga Studios sold for $1.9 BILLION.
It was an 18 year overnight success story.
Their CRAZY journey is below:
1/ Meet Mindbody, a software company that provide business management tools for the wellness industry. It helps fitness, salon, and spa businesses run their operations, and attract and retain customers. But it started as a simple software tool for yoga studios...
2/ Mindbody was founded in 2001 by Rick Stollmeyer and Blake Beltram. They were inspired by their own passion for wellness and wanted to create a solution that would make it easier for people to find and book wellness services.
3/ The first version of the software was a desktop application that ran on Windows. It was sold on CDs and installed manually by the founders. They faced many technical issues and customer complaints, and struggled to make ends meet.
4/ In 2005, they decided to pivot to a web-based software that could be accessed from any device and location. They also expanded to serve other segments of the wellness industry, such as pilates, martial arts, personal training, massage, and beauty.
5/ A year later, they raised their first round of funding from angel investors. They also hired their first employees and secured their first office in San Luis Obispo, California.
6/ Mindbody then launched a feature that allowed people to search and book wellness services near them. This unlocked a bit of a network effect. As more and more customers used Mindbody to find classes, a 'gravitational pull' was felt by gyms not utilizing their offering.
7/ In 2010, Mindbody launched its API products, which enabled third-party developers to create apps and tools using Mindbody data. I've written about the power of vertical-specific app stores and the incredible moat they create before:
8/ In 2011, Mindbody raised $35 million in Series D funding from IVP and Bessemer Venture Partners. Just a year later, they raised another $50M in Series E funding. You can read Bessemer's original investment memo here (it has some gems):
9/ Part of that capital enabled Mindbody to acquire Fitness Mobile Apps, a company that created custom-branded mobile apps for fitness businesses. A massive request from their base of customers.
10/ Mindbody went public in 2015, raising $100 million in its IPO. It became one of the leading SaaS companies in the wellness space, serving over 60,000 businesses and millions of consumers in 150+ countries.
11/ A few years after their IPO, Mindbody was acquired by Vista Equity Partners in 2019 for $1.9 billion. A 68% premium over its market value at the time.
12/ The Mindbody deal was seen as a validation of the potential of the wellness industry and the value of vertical SaaS solutions. From a simple software tool for yoga studios to a wellness software empire. An 18 year overnight success...
One Biz Story:
20 Investment Memo’s From Bessemer
Click the photo above to see the memos
One ‘How To’:
Guide To Raise Venture Capital
Click the photo above to see the breakdown