Financing platform Bonside has inked a $300,000 deal with yoga studio Y7.
Bonside, which launched in June with $4.35 million in equity funding, provides brick-and-mortar businesses with upfront capital ranging between $250,000 and $500,000, which will be paid back in 1 to 3 percent monthly revenue increments. This marks one of the platform’s preliminary deals; it has also partnered with Jojo’s ShakeBar, Matchaful and Evolve Med Spa.
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“We generally are providing anywhere from 1 to 1.5 times what a business is doing in monthly revenue,” said Bonside founder and chief executive officer Neha Govindraj.
Bonside’s mission is to highlight brick-and-mortar businesses by providing them additional financing for expansion, so they can preserve ownership and prolong other investment and revenue sources. The firm has provided yoga studio Y7 with $300,000 for physical expansion; health and wellness is a key vertical for Bonside.
“If you’ve got customer loyalty, small footprint and great margins, you’re winning,” she said, explaining Y7 met all of these. “The way we provide our financing is through a percentage of revenue and so we can build high confidence in your revenue if you have customer loyalty because we know that revenue is going to continue to come back.”
Following slower in-studio attendance post-pandemic, Y7 launched a digital platform in partnership with Universal Music Group at the end of last year, as it strategized additional expansion. “With the forced closures of the pandemic and mitigating our risk, we really started to downsize and think a lot smarter about how we’re going to use physical locations,” said Y7 founder and CEO Sarah Larson Levey.
However, now the brand is betting on brick-and-mortar expansion as clients are returning to in-studio. “What we’re seeing with our clients is that our monthly members, the digital membership comes with their monthly unlimited membership, so we’re seeing them use it as a supplement to their in-studio classes,” Larson Levey said.
Virtual fitness has seen an overall decline and plateau, and now, 10 percent of Y7’s overall customer base is digital-only, according to Larson Levey.
“In the last six months, we’ve started to recover and see our numbers return back to normal,” she said. “When we looked at what we wanted to do with the company and expanding through an omnichannel vision, we decided we didn’t want to take on any more institutional capital.” The brand currently has one private equity partner.
With the $300,000, Larson Levey plans to open a Y7 in West Hollywood and one other location by September; plans call for a total of two to three new locations by the end of the year. Through 2023, Austin, Texas, and Los Angeles are also key markets. Larson Levey noted in the future, they will look into expanding in New York, Houston, Dallas, Miami and Chicago. Bonside plans to be a partner for Y7’s future expansions, as well.
With this expansion and the return to in-studio classes, the goal is to return to pre-pandemic levels of $12 million to $15 million in annual revenue, according to the brand.