Meditation app Headspace raises $93 million fund
Headspace, a startup of healthcare has caught wide attention recently. The company developed a meditation app in order to help people embrace a healthier and happier life. Founded in London in May, 2010, the company is headquartered in Santa Monica, CA, U.S, and also has offices in San Francisco and London.
According to figures released by the company, Headspace has more than 2 million paid subscribers for its app and more than 600 corporate customers, including Adobe, Starbucks and GE. It currently works with 15% of Fortune 500 companies. The company’s business-to-business segment saw its revenue double between 2018 and 2019.
It is reported that two years ago, Headspace announced it would seek FDA approval, with the hope of becoming the first “prescription meditation” app. It hoped to get approval in 2020, but didn’t share details on the specifics of what it would pursue. However, according a current statement from the company, it seems to have changed the direction.
“We aren’t closing the door to seeking FDA approval in the future if that turns out to be the most viable way to cater to the unique needs of patients,” a company spokeswoman wrote in an email. “But at this time, we find that our time and resources can be best spent pursuing rigorous clinical tests and processes that will allow us to bring an effective digital therapeutic product to market that meets the specific needs of the consumers.”
Headspace said it has conducted more than 70 clinical studies with research partners including Carnegie Mellon, the University of California San Francisco and Stanford University. According to ClinicalTrials.gov, Headspace’s app was used in a 1,000-person randomized clinical trial sponsored by Emory University to test the effects of meditation on pain management, narcotic use and emotional well-being. The study started in 2018, and its estimated completion date is April, 2020. In addition, the company’s app was also used in a 1,458-person trial led by the University of California San Francisco to measure meditation’s effects on work stress. Headspace was listed as a collaborator in the trial.
Headspace has raised a total of $93 million in funding, including a $53 million equity round and $40 million of debt capital. The company said it would put some of the funds toward clinical tests and product sales. It is also expanding into other markets, launching versions of the app in other languages.
In fact, the whole meditation market in US is exploding. According to the latest data of Sensor Tower, the top 10 meditation apps gained total revenue of 195 million dollars in 2019, showing a 52% year-on-year growth. Calm, another company developing meditation apps which was founded in 2012, announced at the beginning of 2019 that it had raised 88 million dollars of fund, becoming a strong force in the field.
The popularity of meditation apps is closely related to the lifestyle of millennials who get married and give birth later in life compared with former generations, so they have more time to focus on their own needs. Thanks to the internet, the spread of health and self-care information has been quickened, leading more people into the realm of meditation. Meanwhile, a long-time inclination for digital devices tends to aggravate anxiety and meditation can alleviate such feelings. Young people’s preference for the subscription system also facilitates the growth of meditation apps.
Now let’s look back at China. The meditation market in China also shows signs of a rise. At the end of 2018, mobile app “Xiao Shui Mian” (sound sleep) and “Knowyourself” both launched meditation programs. The latter welcomed 650,000 users in two days. Audio app for mental health “Tide” (Chao Xi) launched deep meditation programs and successfully raised funds.
However, due to a lack of recognition and inclination to Asian religions, lower health awareness and less willingness to pay for online health programs, Chinese people may not be as strongly attracted by meditation apps as Westerners are.