Mindbody, a platform for booking and managing fitness classes and other wellness services, has entered into an agreement to acquire online fitness membership company ClassPass in an all-stock deal for an undisclosed amount.

Axios reported that Mindbody will hold between a 60% and 70% stake in the combined business. The ClassPass app and website will continue to operate, and its CEO, Fritz Lanman, will serve as president of ClassPass and Mindbody Marketplace, a suite where businesses can list their services.

"The ClassPass network includes many businesses already working with Mindbody. By combining our respective operations, we will create more seamless integrations and unlock new revenue opportunities for business owners using both services, while continuing to support all fitness, salon and spa businesses who choose to work with Mindbody or ClassPass," Lanman said in a statement.

"For consumers using our marketplace and professionals enrolled in the ClassPass Corporate Program, our goal is to create greater choice and flexibility in the experiences they can book."

In conjunction with the acquisition, Mindbody announced a $500 million strategic investment led by Sixth Street. The company said the influx of capital will go toward growth and building upon investments it made during the COVID-19 pandemic.

WHY IT MATTERS

Mindbody argues that consumers are ready to go back to in-person fitness classes and other services after the long lull during the pandemic.

"This acquisition comes at a pivotal time for the wellness industry as it continues to rebound from COVID-19 related closures – and local and authentic experiences are more important to people than ever," Josh McCarter, CEO of Mindbody, said in a statement.

"Our companies share a singular focus on bringing wellness experiences to more people, in more places. By leveraging the best of both companies' technology and expertise, we are more committed than ever to providing studios with best-in-class tools to help them grow and thrive, while also driving more consumers to their businesses."

THE LARGER TREND

Just before the pandemic in January 2020, ClassPass raised a significant $285 million in Series E funding, bringing its valuation to over $1 billion. The company said the raise would go toward speeding its international expansion; it had acquired GuavaPass a year earlier to move into Asia and the Middle East. 

Meanwhile, Mindbody acquired performance tracking platform FitMetrix in 2018 and partnered with Fitt, a platform that highlights local fitness and wellness events, in 2019. 

Other companies focused on fitness classes include Gympass, which announced a $220 million raise in June, as well as virtual class options like FitOn and Moxie. 

Big names in tech such as Apple and Amazon have also added workouts to their digital health offerings.