The Seattle startup ecosystem has a brand new unicorn.
Zenoti simply reeled in a $160 million Series D spherical to assist supercharge its enterprise software program product utilized by greater than 12,000 spas, salons, and different wellness companies throughout the globe.
The Bellevue, Wash-based firm joins an elite group of Seattle-area startups valued at greater than $1 billion, together with 5 — Convoy, Auth0, Outreach, Qumulo, Remitly — that reached “unicorn” standing over the previous two years.
Zenoti has flown considerably under-the-radar since two brothers got here up with the thought for the enterprise again in 2011.
Co-founder and CEO Sudheer Koneru spent greater than seven years at Microsoft as a director and product unit supervisor throughout the Windows division. He went on to launch an e-learning startup that ultimately morphed into an HR software program firm referred to as SumTotal Systems.
In 2008, he took a break from work.
“I didn’t think I would have started a company doing spa salon software, for sure,” Koneru advised GeekWire final week.
But Koneru had invested in a sequence of well being golf equipment, spas and salons in India. That uncovered him to the outdated back-end techniques used to assist maintain the companies operating.
“There was software, but nobody built the software from an enterprise perspective,” he mentioned.
Koneru teamed up along with his brother, Dheeraj Koneru, one other longtime tech trade chief and former Microsoftie. The pair offered their stakes within the spa and salon firm and launched Zenoti, betting on a a lot bigger alternative.
That choice paid off. Zenoti now serves chains together with European Wax Center, Hand & Stone, Massage Heights, Toni&Guy, Gene Juarez, and extra that use its software program for every little thing from scheduling to funds to stock.
The firm makes cash by charging a subscription payment per retailer; it additionally has a fast-growing funds arm. Revenue has doubled this yr and is anticipated to develop 120% in 2021. Koneru declined to supply particular figures.
The pandemic closed a lot of its prospects’ places briefly. But it has additionally helped shine a highlight on Zenoti’s know-how that may allow touchless experiences reminiscent of funds from a cellphone or self-check-ins — handy options which may stick in a post-pandemic world.
“It’s turned out to be a great window for us,” Koneru mentioned.
In a weblog put up about magnificence and wellness in a post-COVID world, Koneru particulars a “tectonic transformation” that he anticipates within the magnificence and wellness trade within the wake of COVID-19 due largely to the non-public and bodily nature of the work.
“Cloud-based, always-on, device-independent software has already transformed many other industries like transportation, media and communication,” he wrote. “While the beauty & wellness industry has been gradually migrating to such platforms over the last decade, the current crisis may be the catalyst to accelerate this adoption.”
With the contemporary money, Zenoti plans on increasing to pet grooming and health.
“There is no good enterprise-class software in these verticals,” Koneru famous.
Koneru estimates the whole market alternative at round $14 billion. Zenoti is trying to personal a big chunk of that. Most of its opponents provide desktop-based options or single-store choices, Koneru mentioned.
“We think there’s a huge opportunity to be the category leader in this space,” he added.
Zenoti employs 550 folks, with round 100 within the Seattle area and almost 400 in India. It went by a small spherical of job cuts earlier this yr. Total funding so far is $250 million.
Advent International led the Series D spherical. Tiger Global and Steadview Partners additionally participated.
“The wellness industry is ripe for disruption, particularly as COVID-19 has made it more important than ever to eliminate unnecessary face-to-face interactions wherever possible,” Eric Wei, a managing director on Advent’s know-how crew in Palo Alto, Calif., mentioned in a press release.
Zenoti is ranked No. 20 on the GeekWire 200 checklist of prime Pacific Northwest tech startups,
Despite the pandemic, enterprise capitalists are pouring cash into Pacific Northwest tech corporations at document ranges. Investors sunk $1.1 billion throughout 65 offers in the course of the third quarter, in line with GeekWire’s tally, derived from our operating checklist of Pacific Northwest startup investments. Funding totals from July and August eclipsed final yr’s ranges. The funding exercise follows a robust first half of 2020 for Seattle and the broader Pacific Northwest startup ecosystem.