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”
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.