MINDBODY receives fund from two venture capital firms

MINDBODY, Inc., the industry leader in cloud-based, business management software for health and wellness organizations worldwide, has received a major investment from two of the country's most respected venture capital firms, Bessemer Venture Partners and Catalyst Investors. The infusion of private equity, totaling $14 million, includes an initial tranche of $11 million, with an additional $3 million option that may be exercised at any time within the next 36 months.  

Named the 21st fastest growing software company by Inc. Magazine's 2009 Inc. 500 list, MINDBODY has capitalized on its successful Software as a Service (SaaS) solution, which includes Web-based scheduling, e-commerce, integrated payment processing and reporting capabilities, as well as a low monthly subscription cost. "To some degree, the recession has worked in our favor, as small and medium-sized businesses search for innovations to help them cut costs and increase revenues," said Rick Stollmeyer, founder and CEO of MINDBODY. "They're also realizing that in the face of rapid technological innovation, they can no longer afford to do business on paper."

Following 60 percent growth and nearly $10 million in revenue in 2009, MINDBODY has accelerated substantially in recent months. The company increased its subscriber base 72 percent year-over-year in the first half of 2010, and is presently serving 9,300 businesses in 62 countries.

"One of the most powerful trends in the software industry is the adoption of Web-based automation by small businesses. With its base fitness, spa, salon and wellness business customers, MINDBODY is already the clear leader in driving this adoption and should continue to experience extraordinary growth," said Jeremy Levine, a partner with Bessemer Venture Partners (BVP) and newly appointed MINDBODY board member. BVP manages more than $2 billion of venture capital invested in more than 130 companies located around the world.

Catalyst Investors, which first contributed $5.6 million to MINDBODY in March 2009, increased their position with a second round of investment. "MINDBODY has demonstrated outstanding performance since our investment last year. We are excited to be 'doubling down' so the company can accelerate its growth going forward," said Tyler Newton, Partner and Research Director at Catalyst Investors. Catalyst makes private equity investments in high-growth, lower middle market companies including SaaS, digital media, Internet infrastructure and wireless communications sectors.

"This investment will further accelerate the pace of our product development. Our aim is to meet or exceed best-of-breed capabilities in every market we serve, while providing game-changing innovations that help our businesses boost their bottom lines, simplify their lives and better focus on the health and wellness of their customers," said Stollmeyer.

The funds will also be used to expand the company's global reach. "We're planning to increase our sales, marketing and support capabilities around the world, with expanded presence in our New York, UK, EU and Australian offices," said Robert Murphy, partner and Chief Sales & Marketing Officer for MINDBODY. "We fully expect these strategic improvements will help us grow another 60 percent in the coming year."