It’s a year later than they had initially planned, but Zeel is finally expanding its massage-on-demand service beyond New York to more cities in the U.S. — rolling out in the Bay Area, Los Angeles, and Miami.
It’s the next step toward creating what Chief Executive Samer Hamadeh says is at least a billion-dollar business. “We believe we’re creating something that is unique and interesting,” Hamadeh says. “We believe that we can be all over the world in 200 plus cities and this is a billion dollar plus revenue opportunity.”
For now, Zeel’s massage therapists are only operating in four of the largest metropolitan areas in the U.S. Customers in the Bay Area from the South Bay to the East Bay, greater Los Angeles, and South Florida (from Miami to Palm Beach) will now be able to treat yo selves .
Zeel launched the massage-on-demand service in New York in April 2013, after beginning its life as a sort of ZocDoc for alternative health practitioners in early 2012. During that first year, Hamadeh and his team noticed that one category was by far the most popular among customers — massage.
“We ended up booking 15,000 massages with the old Zeel and massage was over half the bookings,” says Hamadeh. Through its matchmaking and booking service, Zeel noticed that most massages were arranged as more of an impulse buy. “If massages were booked two or more days out there would be cancellation rates of 28%,” says Hamadeh. “And 55% of requests were for within four hours. The industry isn’t set up to offer massages within four hours.”
Beyond basic booking logistics, industry professionals had problems with the current system for scheduling appointments, and the safety issues involved with delivering “in-home” massages. Zeel moved to address that by providing a vetting system for both massage therapists (who have to be licensed or certified in every state where Zeel operates) and customers who have to have their identity verified through Experian when they set up an account.
While safety is one consideration for massage therapists, compensation is another — and it’s another area where Zeel says it beats traditional competition. The massage costs about as much as a treatment at a nice spa, with prices (including tax & tip) in Manhattan for a 60-minute massage ranging from roughly $141 to $159 and in the SF Bay Area from $117 to $130, depending on whether the customer has a massage table in their home or apartment. Zeel also offers a “Zeelot” membership program, where customers pay a flat rate of $121.88 per month for one massage in NYC and a flat rate of $99.12 per month for one massage in Miami, Los Angeles, or San Francisco and the surrounding counties. Even at those prices, therapists can make up to 75% more than they would at a spa, Hamadeh says.
The service has taken off in New York with tens of thousands of massages delivered over the course of the last year-and-a-half. Zeel has 420 therapists in New York, another 170 in South Florida, 150 in Los Angeles, and nearly 150 in the Bay Area. It began beta-testing its service through the summer and is now set to go live in those geographies. The company’s app is available for iOS and Android devices and new customers can get $25 off their first massage with the special code “LAUNCH”.
To support the company’s continued growth, Zeel quietly went back to the market at the end of last year to raise $1.75 million in a second seed round with participation from investors including Lightbank and Corigin Ventures, Prolog Ventures also invested in the round along with several angel investors who’d previously backed the company.
Bringing massages to customers’ doors has opened up a new range of customers who previously hadn’t considered massages, Hamadeh says. Roughly 72% of the company’s orders come in after 5 in the afternoon. Around 26% of those are actually happening between 9 at night and 1030.
Hamadeh, the former chief executive at the employment information clearing house, Vault.com*, came to Zeel through the notion that the company could make the market for alternative medical health practitioners more transparent in the same way Vault sought to bring greater transparency to the job market.
Over the next year or so, customers around the country should expect to see Zeel’s services expanding to even more geographies as the company looks to raise a significant new round in the first or second quarter of 2015. “It’s going to be a big round,” says Hamadeh. “That’s the nature of the world right now. If you’re trying to build a global, local-services business you need a lot of cash if you’re going to stay ahead of everybody.”
* In the interest of full disclosure, I’m friends with Ed Shen, a former Vault.com and current Zeel employee.