Technology startup Zenrez provides yield management and pricing software tools for classes in fitness studios — a fast-growing segment of the health and fitness industry.
According to Zenrez, the International Health, Racquet & Sportsclub Association recently reported that a majority of the 2,300 new exercise facilities opened in 2015 were fitness studios. From 2012 to 2015, the report found that consumer-reported membership in traditional fitness clubs grew by 5 percent. In the same period, consumer-reported membership in fitness studios grew by over 70 percent.
“Fitness classes are the preferred method of how millennials choose to workout and boutique studios offer the highest-quality experience,” said Zenrez cofounder and CEO Matthew Capizzi. “Boutique studios have moved away from the old big-box gym subscription breakage model and instead have opted for a more consumer-friendly but also more complex model in the form of pay-as-you-go packs. Therefore, they need a much more sophisticated solution to effectively manage their business, and that’s what we’ve built with Zenrez.”
Zenrez recently announced the close of a $6 million Series A venture funding round led by ARTIS Ventures. Existing investors Summit Action Fund, Precursor Ventures, Nucleus Adventure Capital, C2 Ventures and Transmedia Capital also participated in the round. To date, Zenrez has raised some $10 million in venture funding.
Bookings through the platform have reportedly grown 400 percent year over year. The company currently works with 500 studios in San Francisco, Los Angeles, New York, Boston, Pittsburgh and Seattle. Zenrez will reportedly use the Series A round to fund expansion into other major U.S. cities in 2017.
“There’s much more revenue potential in the pay-as-you-go model,” Capizzi said. “The challenge becomes maximizing utilization because you only get paid when people work out. This means creating a consistently great product so your customers want to come back as well as offering flexible pricing options to ensure you’re hitting all fitness-goer segments. Zenrez addresses the latter which helps unlock latent demand and drive additional bookings which can result in 10 percent or more of incremental monthly revenue for studios.”
By the end of this year, Zenrez reported plans to work with over 2000 studios across the U.S. Additionally, the tech startup will use the new funds to expand its pricing technology into other fitness and wellness services beyond classes.