The Seattle startup ecosystem has a brand new unicorn.
Zenoti simply reeled in a $160 million Sequence 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 concept 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 Home windows division. He went on to launch an e-learning startup that finally morphed into an HR software program firm known as SumTotal Techniques.
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 informed GeekWire final week.
However Koneru had invested in a series of well being golf equipment, spas and salons in India. That uncovered him to the outdated back-end techniques used to assist preserve the companies operating.
“There was software, but nobody built the software from an enterprise perspective,” he stated.
Koneru teamed up along with his brother, Dheeraj Koneru, one other longtime tech trade chief and former Microsoftie. The pair bought their stakes within the spa and salon firm and launched Zenoti, betting on a a lot bigger alternative.
That call paid off. Zenoti now serves chains together with European Wax Middle, Hand & Stone, Therapeutic massage Heights, Toni&Man, Gene Juarez, and extra that use its software program for every thing from scheduling to funds to stock.
The corporate makes cash by charging a subscription charge per retailer; it additionally has a fast-growing funds arm. Income has doubled this 12 months and is predicted to develop 120% in 2021. Koneru declined to offer particular figures.
The pandemic closed lots of its clients’ places briefly. Nevertheless it has additionally helped shine a highlight on Zenoti’s expertise that may allow touchless experiences equivalent to funds from a cellphone or self-check-ins — handy options that may stick in a post-pandemic world.
“It’s turned out to be a great window for us,” Koneru stated.
In a blog post 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 private 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 entire market alternative at round $14 billion. Zenoti is trying to personal a big chunk of that. Most of its opponents supply desktop-based options or single-store choices, Koneru stated.
“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 way of a small spherical of job cuts earlier this year. Complete funding up to now is $250 million.
Creation Worldwide led the Sequence D spherical. Tiger World and Steadview Companions 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 Creation’s expertise workforce in Palo Alto, Calif., stated in a press release.
Zenoti is ranked No. 20 on the GeekWire 200 record of high Pacific Northwest tech startups,
Regardless of the pandemic, enterprise capitalists are pouring cash into Pacific Northwest tech firms at report ranges. Traders sunk $1.1 billion throughout 65 offers throughout the third quarter, in keeping with GeekWire’s tally, derived from our running list of Pacific Northwest startup investments. Funding totals from July and August eclipsed final 12 months’s ranges. The funding exercise follows a strong first half of 2020 for Seattle and the broader Pacific Northwest startup ecosystem.