Payal Kadakia should give a master class in multitasking: in late January, when we were talking about ClassPass, the fitness membership boutique platform she launched in 2013, she politely stopped my questions and warned that she might scream in pain at any moment I told her. 'I'm a 36-year-old soon-to-be mom,' she said. 'I've been having contractions for a few days now, but sometimes it's better to distract myself.'

At the time of the interview, 2020 is less than a month old, but it's already been a big year for Cadakia: ClassPass has completed a Series E funding round, taking the seven-year-old company to a $1 billion valuation and earning the first The company has the distinction of being the first unicorn of the decade. [According to CrunchBase (opens in new tab), 2019 was a historic year for female-founded unicorn companies, with 21 female-founded unicorn companies achieving the feat. 'I am truly honored to be part of this cohort,' says Kadakia. 'As a woman of color and as a pregnant woman, it's so important to see people from all walks of life accomplishing such amazing things.'

While statistically increasing, the amount raised is still shockingly low: in 2019, women raised 2.7% of the total amount raised from venture capital, totaling about $3.5 billion, less than the amount raised by male-led firms Juul and WeWork alone. It's hard enough to get investment deals as a female founder, but talking about it while visibly pregnant brings a new level of difficulty, making investors wary that founders may not have the time or resources to grow their companies.Fast Company and (open in new tab) Inc (open in new tab) conducted a 2017 survey in which some female founders reported feeling criticized for raising capital while pregnant.

Thankfully for Cadakia, she had been through the VC ordeal before and did not feel the pressure that other pregnant founders might feel. 'When I started the company, it was about finding the right people,' she said. 'Ultimately, you have to find someone who understands that you're a woman and that [pregnancy] is going to happen in your life. And I'm actually excited for you. My investors are sending me gifts.

Nevertheless, the road to $1 billion was not entirely smooth. It was a sideline in traditional Indian dance that helped her make the leap from corporate culture to startup life (she had been learning it since childhood), and in 2011 she abandoned her position as Associate Director of Digital Strategy and Business Development at Warner Music Group and took the GMAT She also ditched her textbooks, abandoned her plans to go to business school, and started a dance company, Sa Dance. She still oversees the company today. 'I had a great dance career at night and on weekends, and I was an analyst by day,' she says. 'I didn't want to live two lives. Whenever something like that happens in your career, you have to question it'

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She credits this gamble with giving her the confidence to take another risk, launching ClassPass just one month later. One day of struggling to find ballet classes became the seed of the idea for the fitness class search engine; it took Kadakia and her team about a year to build the app, and they were able to get the app up and running in just a few months. It took another year to rebuild the platform, secure investors, win partnerships, and shape the modern ClassPass. When ClassPass first launched its service, users could take 10 classes a month for $99.

Since its initial pivot, the company has not stopped iterating, sometimes to the dismay of its users. ClassPass launched in the summer of 2014 with unlimited memberships ($180/month) and quickly became one of the company's most popular services, but then it became its biggest headache. The hype quickly spread and the situation became unsustainable for ClassPass; in November 2016, Kadakia wrote in an open letter about the situation The more classes taken, the more we pay. As you can imagine, our cost of doing business increased rapidly." ClassPass tried to raise membership prices to offset costs, but users balked. The company eventually decided to discontinue memberships.

"We began to realize we were antagonizing our customers. Every time someone went to class, it had a negative impact on our bottom line." Every time a ClassPass user overslept and missed the 7 a.m. kickboxing class, he or she forfeited his or her prepaid credits. At that point, she says, "As a founder, I knew we had to change."

The company pivoted again in 2018, moving to its current credit model: instead of a monthly allotment of classes, users pay a fixed amount of credit and can use it however they want. Classes that were previously evenly distributed are now set at varying amounts, as is surge pricing (e.g., a sleepy Wednesday afternoon yoga session is less credit than a hot Sunday morning spin class). According to Cadacia, this new system will provide more flexibility for ClassPass users and will be more profitable for both ClassPass and its studio partners.

Cadakia then stepped down as CEO to assume the role of executive chairman, handing over control to her longtime business partner, Fritz Lanman. For her, this decision meant getting out of the weeds and focusing on what was most important: her customers. For me, titles mean nothing," she said. For me, titles mean nothing. In fact, I felt constricted by the title of CEO; I didn't start the company to be a CEO. I started the company because I wanted to have an impact on the world."

Influence is an understatement. With a presence in about 30 countries (and plans to expand to more European cities this year) and a new corporate wellness division, ClassPass has become an established way to work out. With more than 5 million classes available each month, and more than 30,000 partner studios and gyms to choose from, the program is a great way to get in shape, get in shape, and get in shape.

However, not all ClassPass partners are happy with the company's evolution; after speaking to Kadakia, a VICE article (opens in new tab) featuring largely anonymous former and current ClassPass studio partners, reported that ClassPlass is " squeezing studios to death" and claimed that the current model was unsustainable and risked bankrupting management.

I emailed Kadakia for comment, and she responded while on maternity leave, continuing to multitask. Here is her statement:

"Supporting our valued partners has always been at the core of our mission. I started this business several years ago to get more people moving and to support the blossoming boutique fitness industry. Over the years, we have refined our business model to better align the interests of the studio, our customers, and ourselves. For ClassPass to be successful, our customers and partners must also be successful.

Most studio partners have found ClassPass to be a very positive marketing channel for their businesses. In fact, 95% of our 30,000 studio partners use the ClassPass platform, and we hear from many studio owners that they are very satisfied with their partnership with ClassPass. That said, we are always striving to improve our services. There are always opportunities to do a better job of sending more members to more studios and supporting the growth of the industry as a whole."

Only the future will tell how ClassPass will address these concerns and further grow as a leader in the wellness field. But the company seems to have mastered the art of the pivot, and Cadacia seems ready for the challenge. The idea of iteration has always been part of our DNA," she says."

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