Headspace, the Los Angeles-based mindfulness and meditation company locked in a bitter competitive struggle with Calm for leadership in the mental wellness world, has raised new capital to try to take the pole position.
The company has just closed on $93 million in new equity and debt financing from a slew of investors as it pursues a number of clinical studies that could provide scientific validation for the somewhat nebulous claims around the benefits associated with mindfulness and meditation.
That clinical validation can also unlock new dollars in the form of government payments for mindfulness therapies that could be used to treat a variety of conditions. It also makes more valid the company's pitch to companies as a useful component of an employee benefit program.
The company touted a pipeline of 70 clinical studies working in conjunction with academic partners, including Carnegie Mellon, University of California San Francisco and Stanford University.
Headspace's new cash comes from investment firm blisce, with participation from Waverly Capital, Times Bridge (the investment arm of The Times Group of India), The Chernin Group, Spectrum Equity and Advancit Capital. A $40 million debt financing from Pacific Western Bank supplemented the $53 million in equity.
“Headspace has shown millions of people the power of using mindfulness to mitigate stress, anxiety, and other everyday issues while continuing to advance the field through clinically-validated research,” said Richard Pierson, the chief executive and co-founder of Headspace, in a statement. “As we think about the next ten years and beyond, we are focused on harnessing this power and applying it to other areas of our members’ lives to help them create healthy routines that last a lifetime -- whether that is through our Headspace consumer app, the work we currently do with hundreds of employers, or with healthcare providers as we look to deliver better access.”
So far the company's app has been loaded more than 62 million times in 190 countries. It already has over 2 million paid subscribers and more than 600 businesses are using Headspace's on-the-job mental wellness tool.
The new money will be used to double down on its pitch to businesses and healthcare practitioners, according to a statement from the company, as well as to look at international markets. The company already has German and French versions of the app and has appointed the Apple executive Renate Nyborg to lead its European expansion.
As the new cash comes in, Headspace also has more money to compete for the attention of consumers with Calm, which raised an $88 million round (one that valued the company at over $1 billion) a little over a year ago.
Backed by TPG Capital and the entertainment agency CAA, Calm has recently inked deals with big time celebrities like LeBron James, who also has an equity stake in the company.
Calm's approach seems to center more on a direct-to-consumer strategy that has seen the company enlist celebrities like James, John McEnroe, Matthew McConaughey’s and the English comedian, actor and writer Stephen Fry.