Cloud-based spa and salon software supplier Zenoti has secured US$160m (€131.6m, £119.2m) in funding from private equity firm Advent International.
It's raised approximately US$250m (€205.7m, £186m) in funding since launching in 2010 and this latest investment has seen Zenoti reach the US$1bn unicorn valuation mark.
The valuation is based on details such as growth rate – Zenoti grew by 80 per cent in 2019, 100 per cent this year and is projected to grow by 120 per cent in 2021 – its low churn rate of clients, which is less than 5 per cent, microtrends in the market and the high-end brands it works with.
Zenoti's software is used by more than 12,000 businesses in 50-plus countries and well-known clients include MGM Resorts and franchises Massage Heights and Hand & Stone Massage and Facial Spa.
The brand is known for its automated and AI-driven algorithms which spas use to optimise their business and enhance profitability and the new funds raised will be used to fuel further AI innovations.
"Our goal is to help spas streamline everything they do so they can focus on their craft – which is making people feel great," Zenoti CEO, Sudheer Koneru, told
Spa Business.
"We're just about to launch smart scheduling algorithms which we've been beta testing and smart inventory will follow in Q1."
He reveals that Zenoti is also looking at introducing Uber-like dynamic pricing.
"If you book a car via Uber, customers and drivers don't even question the price, they trust that that's the rate to pay at that time and that's what we're working on [for spas and salons]."
In addition, Zenoti plans to use the money for research and development, creating a 'reputation management' module for example.
Koneru explained that the module will work by 'smart listening' – collating all reviews anyone has ever made about a certain spa over multiple platforms, from Facebook and Instagram to Yelp, and creating trend reports about what consumers feel about a brand and also alerting owners when new reviews are made in real-time.
Koneru believes Advent's investment will help the spa industry at a time of heightened expectations for health and safety during the global pandemic.
"We offer many touchless options from filling out pre-visit forms online so customers can go straight to a treatment room to contactless check-ins and payments," he says, adding that spa consumer and therapist mobile apps help with this too.
"Some spas using our software also offer features like a waitlist where customers are sent a text when a spa is ready for them so they don't wait inside with other people in a reception."
Eric Wei, a managing director of Advent's technology team says: "The wellness industry is ripe for disruption, particularly as COVID-19 has made it more important than ever to eliminate unnecessary face-to-face interactions wherever possible… We're incredibly excited about Zenoti and believe the company has a significant runway for growth."
