St. Louis Park-based fitness programmer Wellbeats said on Tuesday it would be acquired by Toronto's LifeSpeak for $92 million, but CEO Jason Von Bank said it could've kept running solo.
Wellbeats, which produces streaming fitness classes for corporate customers, has been growing rapidly as companies try to boost their employees' physical well-being through digital programs while they work remotely.
LifeSpeak is in a similar space, offering mental health and well-being education for corporations and their employees. The Toronto-based company said in a statement the deal "supercharges" the company's ability to meet rapidly growing demand from organizations to offer a comprehensive, single-vendor solution.
Wellbeats CEO Jason Von Bank said in a phone interview Tuesday that the company was poised to keep growing without an M&A deal, but the acquisition puts it in position to grow even faster by pairing two category leaders.
"This is a tremendous opportunity to disrupt a market that's ripe for a solution," Von Bank said. Upon the completion of the transaction, Von Bank will become chief operating officer at LifeSpeak.
Von Bank refused to compare Wellbeats to specific high-profile streaming-fitness rivals (the most obvious guess would be Peloton Interactive Inc.). But he added, "our direct competitors are expensive and made for people who are already fit. We're trying to find a solution for people struggling with life."
That said, Wellbeats does compare well to Peloton in some user metrics. Founded in 2008 to serve fitness-clubs with on-demand workout videos, Wellbeats pivoted to offer exercise videos to workers through corporate employee-wellness programs.
The company has over 2 million people on its platform and its clients include the U.S. Air Force, HealthPartners, Pacific Life and Land O'Lakes.
Peloton, meanwhile, has 6 million total customers, but most of those are on its proprietary bike and treadmill products. Its app has fewer than 1 million subscribers.
Wellbeats' revenue grew by 45% between 2018 and 2020, making it the No. 35 fastest growing private company according to Business Journal research. In 2021, Wellbeats' revenue was expected to top $17 million.
Wellbeats will become a wholly owned subsidiary of LifeSpeak and maintain its St. Louis Park corporate office along with its studio in Bloomington.
The acquisition of Wellbeats represents LifeSpeak's fourth acquisition since its IPO in July 2021.
