Two execs who helped expand $1 billion ClassPass into 26 markets give their playbook for scaling a growth company

ClassPass

Fitness startup ClassPass has raised a total of $549 million since it was founded in 2013 to launch its subscription fitness service across the world, and was valued at $1 billion in January.
In the past two years, the company has launched into 26 new markets. Using a tried and tested formula it now launches into new countries in a matter of weeks.
Two of its leading execs shared their five lessons for scaling a startup in foreign markets.
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ClassPass was launched in 2013 as a platform aggregating fitness classes for a monthly subscription fee.

Users can choose plans from around $19 to $79 a month, which gives them credits to use on classes from the more than 30,000 exercise studios ClassPass partners with.

Subscribers pay less for classes than they would if they bought them directly, while studios can raise their profile and fill some of the empty slots.

Excess capacity in the fitness industry is the problem ClassPass is trying to solve — 60% of the mats, bikes, and slots in exercise classes are empty, according to Chloe Ross, VP International at ClassPass. By matching users with empty slots ClassPass looks to recoup this lost revenue for fitness studios.

The tech unicorn has raised $549 million in total, most recently in a $285 million Series E led by private equity firm L Catterton and growth fund Apax Digital, and plans to IPO in the foreseeable future. It was valued at more than $1 billion at its last financing in January.

After a number of years ironing out its business model in the US, the company has successfully launched into dozens of new markets over the past two years.

"In 2018 we were live in four countries, and we're now live in 30," says Ross. "The vast majority of that growth is fueled by us developing a playbook for how we launch in a new city in a new country and just repeating that in a very efficient way."

Using this playbook, the ClassPass team are able to launch into new markets in a matter of weeks.

Chloe Ross and Rachel Moncton, ClassPass' managing director for Europe, share their five top tips for other startups looking to scale internationally:

1. Focus on suppliers

Securing the best fitness studios guarantees a high-quality product for users, making it easier to sell subscriptions.

"The user base comes quite quickly if we get the supply right," says Moncton. "So we spend a lot of our time in the pre-launch focusing on the studio partners."

"It would only take us a couple of weeks to scout out what we thought to be the top studios and gyms in a city," she adds. "Signing them up actually wasn't so difficult. We'd have teams of six or seven on the ground and would get 100 or 200 studios ready for launch."

2. Use competition to your advantage

If people already have experience with your competitors, leverage this to explain how your product is different.

Around the world ClassPass competes with a number of other subscription fitness class platforms, including Gympass and Equinox in Europe.

"The great news was actually, in Europe, something about the competitors helped, where the studios understood what a third-party aggregator could do for them," says Moncton. "When we talked about how our our our model was different it really resonated."

By explaining how ClassPass addressed the pain point that fitness studios had experienced with other providers, adds Moncton, they were able to get them on board.

3. Use marketing to get the first customers through the door

Once you have the right suppliers, use that as a hook to get customers interested.

A good way to enhance your marketing campaign is to offer a free trial, adds Moncton.

"We have a really slick app, it's super intuitive to use," she says. "So our thought was if we can just get people in the door trying it, it's great and then we grow a lot from referrals from that first cohort of users."

4. Tackle the easiest markets first

ClassPass has now scaled across 30 countries covering most continents. But, it chose to launch first in the countries with the least complexity in terms of language and cultural barriers.

"We started with the English speaking world, the UK, Australia, and then we went to some major international cities in Asia, then we went to continental Europe," says Ross.

"Now we're growing our business in China, in Shanghai and Beijing, and what we do there is really very different. We have a different app there."

In China, ClassPass is integrated into the company's widely used communications platform WeChat, enabling users to pay for plans with WeChat Pay.

5. Think about the local culture

"Localization is definitely important," says Moncton. "Language is a key one. There are also things with payment types. Credit cards aren't always popular everywhere, so we've added new ways to pay that might make more sense."

For ClassPass, this has meant establishing local marketing teams that tailor the look and feel of the app to the market, as well as consider the best channels to promote it to new users.

But, beyond those things, the core offering of ClassPass works globally: "The concept of people who want an app to go to all these classes, that resonates everywhere."

She adds: "That's how we were able to launch at such a speed."

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