Soothe and Zeel are Uber­iz­ing the mas­sage busi­ness

In-home ser­vices Soothe and Zeel are ex­pand­ing with new cash “It’s just the best thing that ever hap­pened”

Bloomberg Businessweek (Asia) - - CONTENTS - −Selina Wang

Vic­to­ria Land’s back aches. It’s been a month since the 31-year-old pub­li­cre­la­tions man­ager’s last mas­sage—her sched­ule’s un­pre­dictable. And al­most as bad was the ef­fort she used to have to put into try­ing to book an ap­point­ment at her lo­cal spa. In­stead, she pulls out her iPhone and opens Zeel, an app that sum­mons a masseuse to her on de­mand. “It can fit into my timetable,” she says. “The fact that you just do the whole thing in your apart­ment—it’s just the best thing that ever hap­pened.”

In 19 U.S. cities, Zeel can send one of its 5,000-plus li­censed mas­sage ther­a­pists to your home, of­fice, or ho­tel room in as lit­tle as an hour. Mas­sages start at $105 for an hour, with prices vary­ing by lo­ca­tion, du­ra­tion, and whether the cus­tomer needs a mas­sage ta­ble. For devo­tees like Land, who says she uses the ser­vice at least once a

month, the com­pany of­fers a “Zeelot” pack­age that in­cludes a year of monthly mas­sages start­ing at $84 per ses­sion. The app han­dles pay­ment, in­clud­ing tax and tip, through a stored credit card, so no cash changes hands. The cus­tomer can also spec­ify a male or fe­male ther­a­pist.

Zeel and archri­val Soothe, which of­fers com­pa­ra­ble ser­vices and prices in 20 cities, take pre­cau­tions on both sides to min­i­mize the chances of things get­ting weird. Be­sides vet­ting the ther­a­pists, Zeel re­quires would-be cus­tomers to en­ter a So­cial Se­cu­rity num­ber, or sub­mit a photo of a driver’s li­cense or pass­port, when they reg­is­ter for the ser­vice. Chief Ex­ec­u­tive Of­fi­cer Samer Ha­madeh says this de­ters 30 per­cent of peo­ple from com­plet­ing the sign-up process, but it’s worth it. “We have to ver­ify who you are,” says Ha­madeh. “There’s a lot of creepy guys that think mas­sage means some­thing else.”

Both com­pa­nies say they take about a 30 per­cent cut of each mas­sage. Three-year-old Soothe says its monthly rev­enue from tens of thou­sands of users just reached $1.2 mil­lion; six-year-old Zeel wouldn’t dis­close rev­enue or user fig­ures. Ha­madeh says his New York com­pany will soon close a fund­ing round to­tal­ing at least $10 mil­lion. Soothe CEO Mer­lin Kauff­man says his Los An­ge­les startup just raised $35 mil­lion. Among other things, the money is fi­nanc­ing ex­pan­sion: Soothe says it’ll roughly dou­ble its city ros­ter by yearend.

Nei­ther mas­sage app has turned a profit, but in­vestors say they’re pa­tient. While many de­liv­ery star­tups are strug­gling to build sus­tain­able busi­ness mod­els, the lux­ury au­di­ence for on-de­mand mas­sages won’t re­quire the kind of rock-bot­tom prices that have caused prob­lems for other apps, says Brian Sauer, a part­ner at pri­vate equity firm River­side, which has in­vested in Soothe. “We’re not lump­ing all the on-de­mand mod­els into one type of busi­ness,” Sauer says. “They vary dra­mat­i­cally by the mar­ket they’re serv­ing.”

So far, mas­sage ther­a­pists aren’t stag­ing protests over the Uber­iza­tion of their pro­fes­sion. Many are in­de­pen­dent con­trac­tors, so they’re used to cov­er­ing their own in­sur­ance and other work ex­penses. They make at least $69 on a typ­i­cal mas­sage booked through Zeel or Soothe—well above the av­er­age hourly wage of $47 for a masseuse in the U.S., ac­cord­ing to the Amer­i­can Mas­sage Ther­apy As­so­ci­a­tion, a trade group.

The CEOs of both star­tups say they don’t yet have the client base to pro­vide masseuses full-time work. Most of the ther­a­pists have other sources of in­come, split­ting their time among spas, client vis­its, or other ca­reers. Ka­rina Yanku, who’s been work­ing as a mas­sage ther­a­pist for 19 years, says app book­ings have helped sta­bi­lize her work­load. “It was be­com­ing harder to make a liv­ing,” she says. “I started with Zeel three years ago, and I’ve never made so much money in my life.”

“I think the brick-and-mor­tar model will al­ways ex­ist. There are peo­ple that en­joy the full-day spa ex­pe­ri­ence,” Kauff­man says. “But I do be­lieve Soothe and the in-home mar­ket are eat­ing away at that.” Land, the PR man­ager, says she used to visit a spa ev­ery few months. Now she’ll go only if she’s on va­ca­tion.

The bot­tom line On-de­mand mas­sage apps Soothe and Zeel have just about fin­ished rais­ing at least $45 mil­lion com­bined.

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