Consumer desire for services on demand is at an all-time high, and it’s driving growth at massage service Soothe, which is planning to continue its international expansion after receiving another investment from private equity company, Riverside Co.
Soothe allows users to book massages at their homes with approved massage therapists. The business is adding Toronto to its service area in the next month, and plans to be in about 50 U.S. cities by the end of the year, said founder Merlin Kauffman. Riverside invested $35 million in the business in March, following a $10.5 million investment last August.
Riverside isn’t the only private equity firm betting on services on-demand. North Castle Partners, another investment group, the owner of Elizabeth Arden Red Door Spa, has made two acquisitions to grow the business’ on-demand services — CityMani and Manicube. Blowout concept Drybar, which is backed by private equity firm Castanea Partners, operates an on-demand service called Dry on the Fly.
For Riverside, the investment interest came as part of a thesis on the massage industry, said partner Brian Sauer. “People are really incorporating it into their health and wellness regimen…we see a rapidly growing industry,” Sauer said.
Kauffman started the Los Angeles-based business in April 2013 after struggling to find good massages that were compatible with his travel schedule. Spas often close early and the quality of the massage therapists varied, Kauffman said. So, he took $400,000 of his own money and started Soothe.
By the time Riverside jumped on board in August, Soothe was in eight cities. Between September and December, the company grew by 100 percent, he said. “The overall trend is people expecting things in a shorter amount of time,” Kauffman said. “People are accustomed to more immediate gratification.” As anecdotal evidence, Kauffman said that 60 percent of Soothe’s appointments are booked within three-hours of the appointment time.
Part of what differentiated Soothe, Sauer said, is the business’ commitment to employing exceptionally skilled massage therapists. Potential Soothe massage therapists have to be certified and conduct a 30-minute practical demo massage on one of the company’s recruiters, who all have massage therapy backgrounds, in order to join the team. Once they are in the Soothe network, they use a mobile app that links them to massage requests in their area, which they can accept or deny. Kauffman estimated the workers end up making three or four times the amount they would earn at a bricks-and-mortar spa.
The business recently launched in London, and Kauffman plans for it to be available on six continents by the end of 2017, he said.