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Business Operations Business Models

How Does ClassPass Make Money (Business and Revenue Model)

The ClassPass business model

ClassPass logo
Here’s what you should know:
  • What is ClassPass, and how does ClassPass work?
  • How does ClassPass make money?
  • Subscription Revenue
  • Late Cancelation and Missed Reservation Fees
  • ClassPass subsidiaries, acquisitions, and exits
  • ClassPass profit and revenue
  • What is the ClassPass business and revenue model?
  • ClassPass funding, net worth, and valuation

How does ClassPass make money? Here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the ClassPass business and revenue model, how much ClassPass makes per year, and how ClassPass works.

What is ClassPass, and how does ClassPass work?

ClassPass is a health club aggregator that connects and allows users access to their network of more than 30,000 fitness clubs, wellness centers, and beauty salons wherever they are.

Founded in 2013 by Payal Kadakia and Mary Biggins, ClassPass went on to later get acquired by Mindbody on October 13, 2021, for an undisclosed amount.

Since that time, ClassPass has passed more than 100 million reservations booked by its members with its now more than 30,000 health club partners across 28 countries.

So, how does ClassPass work? To use ClassPass, members can get started by first downloading their mobile app on the Apple App Store or Google Play store; and signing up for an account.

After signing up, members can then choose from one of their subscription plans to get some credits. Once they have credits, they can then search the ClassPass marketplace and use filters to choose from thousands of fitness, wellness, and beauty clubs. They can then reserve a spot (time slot) once they’ve found what they’re interested in.

Some of ClassPass’ competitors include Peloton, Planet Fitness, FitOn, and other fitness clubs.

ClassPass App in Apple App Store | ClassPass Business Model | How Does ClassPass Make Money? | How Does ClassPass Work?
Source: Apple App Store | ClassPass

How does ClassPass make money?

According to ClassPass, ClassPass has partnerships with over 30,000 health clubs in which members have booked more than 100 million reservations through the platform since its founding back in 2013.

So how does ClassPass make money off of all these health clubs and bookings?

Below is a breakdown of how much money ClassPass makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how ClassPass makes money in 2022

ClassPass has a revenue model that makes money in two (2) ways; subscription revenue and missed fees / late fees.

#1. Subscription Revenue

ClassPass makes most of its money through the subscription fees it collects from its members.

The subscription service offers five (5) credit tiers; 6 credits, 18 credits, 33 credits, 58 credits, and 100 credits. All of which give access to use these credits at any of ClassPass’ network of 30,000+ health clubs and 5,000+ beauty partners.

What are ClassPass credits? Credits are what members get in exchange for a paying monthly membership fee. And how many they get depends on the type of membership.

Credits are not 1 credit = 1 booking. The number of credits used per booking varies based on popularity, time, and reservation type. You can see how much ClassPass credits cost below.

How much does ClassPass cost?

  • $15 to $199 per month (depending on the subscription plan)
How much does ClassPass cost? | ClassPass Business Model | How Does ClassPass Make Money? | How Does ClassPass Work?
Source: ClassPass

Note: ClassPass members have booked more than 100 million reservations through the platform since being founded back in 2013.

#2. Late Cancelation and Missed Reservation Fees

Another type of fee ClassPass makes money off of is late cancelations and missed reservations.

This happens when a member either cancels their reservation slot within 12 hours of the start time or misses their reservation altogether.

When this happens, ClassPass will issue the unused credits back to the members’ account to reuse and charge them the necessary fee. How much the fee is depends on various factors such as the type of club and the country it was booked in.

ClassPass cancellation and late fee:

  • Late cancelation fee: $9 to $55
  • Missed reservation fee: $12 to $62

Note: Above is the fee cost in the United States. For the full pricing list by country, click here.

ClassPass subsidiaries, acquisitions, and exits

To date, ClassPass Inc has made a total of 5 acquisitions.

Mergers and acquisitions business model
Source: Crunchbase | ClassPass

ClassPass profit and revenue

ClassPass has not released any official reports in regards to company earnings.

Note: Because ClassPass Inc is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the ClassPass business and revenue model?

ClassPass makes money through a few revenue models that they combine within their company, they are:

  • Subscription business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

ClassPass funding, net worth, and valuation

According to ClassPass’ Crunchbase profile, ClassPass has raised $549.2 million over 12 rounds and has a post-money valuation of $1 billion to $10 billion as of January 8, 2020.

On October 13, 2021, ClassPass was acquired by Mindbody for an undisclosed amount.