Boulevard, a spa management and payment platform, has raised $27 million in a new round of funding despite a business slowdown caused by the COVID0-19 pandemic.
Founded four years ago by Matt Danna and Sean Stavropoulos, Boulevard was inspired by Stavropoulos’ inability to book a haircut and Danna’s hunch that the inability of salons and spas to cater to customers like the busy programmer could be indicative of a bigger problem.
The two spent months pounding the pavement in Los Angeles pretending to be college students doing research on the industry. They spoke with salon owners in Beverly Hills, Hollywood and other trendy neighborhoods trying to get a sense of where software and services were falling short.
Through those months of interviews the two developed the booking management and payment platform that would become Boulevard. The inspiration was one part Shopify and one part ServiceTitan, Danna said.
The idea was that Boulevard could build a pretty large business catering to the needs of a niche industry that hadn’t traditionally been exposed to a purpose-built toolkit for its vertical.
Investors including Index Ventures, Toba Capital, VMG Partners, Bonfire Ventures, Ludlow Ventures and BoxGroup agreed.
That could be because of the size of the industry. There is more than $250 billion spent per year across roughly 3 million businesses in the salon and spa category, according to data provided by the company. By comparison, fitness attracts roughly $34 billion in annual spending from 150,000 businesses.
“With limited access to the professionals that help us look and feel our best, I think the world has realized something that our team has always recognized: Salons and spas are more than a luxury, they are essential to our well-being,” said Danna, in a statement. “We are humbled that so many businesses are placing their trust in us during such a turbulent time. This new capital will help accelerate our mission and deliver value to salons and spas that they never imagined was possible from technology.”
According to data provided by the company, Boulevard is definitely giving businesses a boost. On average, businesses increase bookings by 16%, retail revenue jumps by 18% and gratuity paid out to stylists jumps by 24% for businesses that use Boulevard, the company said. It also reduces no-shows and cancellations, and halves time spent on the phone.
“Boulevard is revitalizing the salon and spa industry, as evidenced by the company’s sustained 300-400% revenue growth over the last three years,” said Damir Becirovic of Index Ventures, whose firm led the company’s Series A round and has doubled down with the new capital infusion.
Customers using the company’s software include: Chris McMillan the Salon, Heyday, MèCHE Salon, Paintbox, Sassoon Salon, SEV Laser, Spoke & Weal and TONI&GUY.
Boulevard now has 90 employees and will look to increase that number as it continues to expand across the country.
Investors have taken a run at the spa market in the past, with company’s like MindBody valued at over $1 billion for its software services. Indeed, that company was taken private two years ago in a $1.9 billion transaction by Vista Equity Partners.
As Boulevard expands, the company may look to get deeper into financial services for the salons and spas that it’s already working with. Given the company’s window into these businesses’ financing, it’s not impossible to imagine a new line of business providing small business loans to these companies.
It’s something that the founders would likely not rule out. And it’s a way to provide more tools to entrepreneurs that often fall outside of the traditional sweet spot for banks and other lenders, Danna said.