San Luis Obispo-based software firm Mindbody has secured a $14 million capital infusion led by Bessemer Venture Partners, the biggest disclosed Central Coast financing deal in years.
The deal, announced Aug. 20, brings a top-tier Silicon Valley investor to San Luis Obispo County. It includes $11 million up front and the option to take in an additional $3 million at any time over the next three years.
Mindbody makes online business management software for health and wellness firms such as spas, salons and yoga studios. With 137 percent revenue growth between 2007 and 2009 and $8.3 million in revenue last year, it is the sixth fastest-growing company in the Tri-Counties, according to a recent Business Times survey.
In March 2009, Mindbody inked a deal for $5.6 million in growth capital from New York-based Catalyst Investors, which also joined in the latest financing.
In an interview with the Business Times, Mindbody CEO Rick Stollmeyer said the money will go toward speeding up the rollout of a new service that lets users find and book an appointment with any of Mindbody’s thousands of business partners throughout the country. The firm will also ramp up its marketing, Stollmeyer said.
“The marketing engine is already running pretty hot. We’re adding about 500 clients a month right now,” Stollmeyer said. “That’s about double the rate a year ago.”
The investment will also leave what Stollmeyer called “dry powder” — a reserve fund to buy out competitors. “We could pick them up and be able to execute on time-sensitive opportunities,” he said.
Jeremy Levine, a partner with Bessemer Venture Partners, will take a seat on Mindbody’s board. Bessemer has $2 billion invested and is a top-tier global venture capital firm. It has invested in businesses such as Skype, Yelp, Staples and VeriSign and has taken more than 100 companies public.
For more on this story, look for the Aug. 27 print edition of the Business Times.