Fitness technology is booming, as evidenced by excitement surrounding the planned $100 million initial public offering by Fitbit. Meanwhile, some have begun to question the effectiveness corporate wellness programs.
Mindbody, maker of software for wellness centers, gyms and personal trainers, clearly is betting on the former, while also expressing the view that corporate wellness will only keep expanding. The San Luis Obispo, Calif.-based company this week registered for a $100 million IPO of its own after seeing revenue soar 44 percent last year to $70 million, then experiencing similar growth in the 2015 first quarter.
“Despite the wide availability of corporate wellness programs, the actual participation of employees in such programs remains limited,” Mindbody said in its Form S-1 filing. Citing a Gallup poll, the company said that 85 percent of large employers offer wellness programs, but just only 24 percent of their employees take part. “We believe this is due to the fact that employers lack effective tools to incentivize participation in wellness programs and often fail to satisfy a broad range of employee preferences,” the document explained.
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Mindbody believes that its cloud-based platform, Connect, is self-perpetuating. “As more local wellness businesses adopt our business management and payments platform, more subscriber listings appear on Connect. A larger critical mass of local wellness services on Connect attracts more consumers, which in turn attracts more local wellness businesses that want to engage with these consumers, thereby creating powerful network effects that benefit the entire ecosystem,” the company said.
The same thing happens for corporations with wellness programs, according to Mindbody. “As more local wellness businesses appear on Connect, more employees use our platform to redeem their corporate incentives, which in turn leads to more corporate wellness subscribers being attracted to our platform. Finally, as we add more subscribers, consumers and employees to our wellness ecosystem, we attract more technology developers and partners who can use our API to develop additional apps that extend the capabilities of our open platform,” the filing stated.
Mindbody claims 250,000 wellness practitioners, serving more than 24 million consumers, among its subscriber base of 42,000 businesses in 124 countries and territories.
“According to a report that we commissioned from Frost and Sullivan, our addressable market is approximately 4.2 million wellness businesses worldwide. Based on their analysis, Frost and Sullivan estimates a $9.5 billion market for business management software solutions targeted at wellness businesses in 2015 and expects this market to grow to $15.3 billion in 2018,” the company said.
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[Photo: Ambro]
