May 24, 2024
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Mindbody targets global expansion with IPO


Mindbody CEO Rick Stollmeyer. (Business Times file photo)

Mindbody CEO Rick Stollmeyer. (Business Times file photo)

Mindbody, best known for its business management software for health and wellness companies, is going public with a target of raising $100 million.

In a deal that’s been heralded as the first non-bank stock offering in decades for a company based in San Luis Obispo, Mindbody filed its offering statement with the Securities and Exchange Commission on May 11.

An IPO has long been expected for the growing company, which recently debuted its new headquarters complex located on Tank Farm Road near the SLO airport. The company counts 42,000 local business subscribers in 124 countries, with revenues of $70 million in 2014.

Company CEO Rick Stollmeyer, who owns just over 11.2 percent of the firm, told the Business Times going public will help push the software firm’s global expansion.

“Our mission is to help wellness-based businesses be more successful,” he said. “This [IPO] enables us to do even more of that.”

After years of development, Mindbody rolled out a major corporate wellness platform last year and raised almost $100 million in venture capital to become San Luis Obispo County’s 11th-largest employer and fourth-largest private-sector job creator with about 900 employees on the Central Coast. The company’s headcount is expected to grow to roughly 1,100 in the next several years.

Despite all the growth, the company is still losing money and losses are expected to continue as the company pushes expansion and R&D of its platform. The company lost $24.6 million in 2014. Losses in the first quarter of 2015 were $7.9 million. However, revenue was up 42 percent for quarter to $22.3 million when compared to the same period last year.

According to the company’s filings, Mindbody may not be able to generate sufficient revenue to achieve and sustain profitability as it also expects costs to increase in future periods, with plans to expend substantial financial resources.

Bessemer Venture Partners, which manages about $4 billion in venture capital and was involved in the IPOs of both LinkedIn and Yelp, owns just over 20 percent of Mindbody. New York-based Catalyst Investors owns 15.5 percent. J.P. Morgan, W Capital Partners and Ventura Partners XIII each own 10 percent or less.

None of the existing shareholders indicated they will be cashing out from the initial public offering.