Zenoti was founded in 2010, and it is headquartered in Bellevue, Washington. It provides an all-in-one, cloud-based software solution for the spa, salon and med spa industry. It is a SaaS ( Software as a Service) firm that has recently raised $160million in series D funding to enter into Unicorn club.
Zenoti started its journey from India by its founder, Sudheer Koneru. Zenoti was earlier known as ManageMySpa which managed around 1000 spa and salon brand by digitising appointments and point-of-sale operations and helping with payment and inventory management through its cloud-based software.
Zenoti manages around 12,000+ spas and salons in over 50 countries by allowing its users to seamlessly manage every aspect of the business in a comprehensive mobile solution: online appointment bookings, POS, integrated CRM, employee management, inventory management, built-in marketing programs and more. Zenoti helps clients streamline their systems and reduce costs while simultaneously improving customer retention and spending.
The funding rounds
The company plans to use the recent funding rounds to
- Expansion across European and South American markets
- Aims to double employee count from 550 to 900 by 2022
- Acquisitions of similar SaaS businesses operating in the spa and salon segment
- Enter newer segments of physical therapy, gyms, fitness and pet spas
- Partnering with financial service providers to provide insurance and lending capabilities to Zenoti’s clients and their customers
It also provides an opportunity to increase marketing expenditures. Zenoti can invest more money in research and development to improve algorithms and AI-based support for its customers. The platform is engineered for reliability and scale, harnessing the power of enterprise-level technology for businesses of all sizes.
Zenoti business model is to charge a subscription fee to businesses. It does not take any money from the end consumers. The company has a current burn rate of 1 million/ month and hasn’t yet turned profitable. The recent COVID-19 outbreak has significantly helped Zenoti make its module more digital. By increasing the number of spa and salon chains, Zenoti has been able to bring in other players/clients. Thus, the company plans to turn profitable by the second quarter of 2022.
The current gross margin of Zenoti is 74% but is typical of companies working in SaaS business. SaaS businesses have a gross margin of 70% to 80%, which is unlike any industry. Zenoti makes almost 60% of its revenue from the US market, followed by the U.K., which contributes 20% and India and West Asia makes around 5%.
The company can enter into different geographies and industries as the software offers can be tweaked easily according to the specific need. Zenoti might also go for Initial public offerings after becoming profitable.
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