Today we’re excited to announce our follow-on investment in Vagaro as the company further solidifies its position as the premier business management software solution for health and wellness businesses.
We first met Vagaro’s founder and CEO, Fred Helou, 3.5 years ago, originally drawn by the company’s rapid growth in a distinct and highly-fragmented corner of the SMB market – and one that’s been largely abandoned by incumbent software providers. A cloud-based, industry-specific platform, Vagaro helps salon, spa and fitness businesses optimize operations, reduce complexity and seamlessly process payments. We knew going in that health and wellness businesses, in particular small businesses, were rapidly adopting software to better run their businesses. We also knew that Fred had built an incredibly user-friendly, cost-effective product with huge appeal among customers who tend to be price sensitive. At the time Vagaro had 28,000 customers and was growing by 50%. But what we didn’t yet appreciate before that first meeting was the product-centric, customer-obsessed CEO that Fred is.
We called Fred on a Thursday afternoon, by Friday we’d met in his Dublin, CA office to learn about the business, and by the following week we were hashing out the specifics of Vagaro’s product roadmap and vision to become the full operating system for the health and wellness market. Specifically, when Fred started talking about Vagaro’s strategy for integrating payments into the software as a significant monetization opportunity, it immediately clicked. Not only were we impressed by Fred’s long-term focus and relentless hunger for innovation, but we knew we could bring FTV’s long history and success in both vertical software and payments to the table as Vagaro’s partner in scale. This ultimately led us to invest $63 million at the end of 2018.
Fast forward to today, Vagaro continues to outperform across all dimensions of the business. The company has had a record-breaking year of customer growth. In the last year, the company helped its clients’ sales grow by over 105%, while clients are selling almost 15% more on average as compared to pre-Covid. Vagaro has successfully launched new products and features, such as making rent and fees payments easier and enabling credit card processing via Stripe, and entered new markets where the company continues to quickly earn market share.
But perhaps what’s most remarkable is Vagaro’s success even amidst the throes of Covid, which had a devastating impact on the salon, spa and fitness industry worldwide. At the pandemic’s outset, many of Vagaro’s customers were forced to a grinding halt. As a company that cares deeply about customers, Fred knew that Vagaro needed to do something. He’ll even tell you that he couldn’t sleep for weeks until he and his team came up with solutions to help their struggling customers survive. And they did. Early on the company rolled out a series of product innovations and economic relief measures – from offering integrated video conferencing services to giving away software modules for free to delivering tools aimed at helping businesses safely reopen. It’s just one example of how the company continues to innovate and champion customers, along the way earning even greater loyalty and goodwill in the professional services industry.
As a result, coming out of the pandemic Vagaro had the most net-new customers in its entire company history. From scheduling and appointments to payroll and payments to inventory management and reporting, Vagaro has proven to be the one-stop-shop for small businesses. We love that this is a product-led business whereby growth is viral, driven by a large and growing network of passionate clients.
With purpose-built technology, a smart and product-driven team, and the hearts and minds of customers on our side, we’re confident about the road ahead and excited to continue helping Vagaro expand its product offering and successfully scale to new markets.
