Two Mindfulness Meditation Apps for Investor Awareness
There’s an iconic scene in the movie “Animal House” where chaos erupts on the streets during a parade. A young Kevin Bacon, in his film debut, attempts to restore order, by repeatedly saying, “Remain calm. All is well.” He is eventually flattened by a runaway mob. It’s pure Oscar gold. It also represents how a lot of people are feeling these days between pandemics, politics, and a plethora of other words that start with the letter “p.” Symptoms of anxiety and depression have “increased considerably” in the United States, with about 40% of people kind of freaking out about something last year.
Telepsychiatry has boomed during this time, but good luck finding an online appointment. There has been a ton of news about how mental health workers are totally overwhelmed by the surge in demand for therapy. We’re so desperate to be happy – or at least less unhappy – that the latest craze involving psychedelic therapy is actually going mainstream with investors. And some of them are eating their own acid-laced dog food. One of our own team abruptly ended his LSD-powered self-help therapy session after pulling the bathroom sink out of the wall, so we highly recommend employing a trained
shaman therapist for this new mind-expanding modality. However, one increasingly popular (and safer) form of DIY therapy, mindfulness meditation, is also emerging as a much cheaper alternative to traditional counseling.
The fact that the two most popular mindfulness meditation apps on the market – Calm and Headspace – have raised at least $434 million between them certainly raised our awareness about the potential money-making aspects of finding inner peace.
What is Mindfulness Meditation?
It’s easy to poke fun at this sort of woo-woo navel-gazing. It’s kind of what we do. But study after study has shown that meditation really can help tame anxiety and stress, and even alter how your genes operate after just 15 minutes of clearing the mind. Research into the efficacy of what’s called mindfulness meditation has really taken off in the last 25 years, with just one study dating back to the period from 1995-1997 to more than 200 from 2013-2015. While there are different kinds of meditation practices, mindfulness meditation has become the most common one for online access. Here’s a useful definition from the Mayo Clinic:
Mindfulness is a type of meditation in which you focus on being intensely aware of what you’re sensing and feeling in the moment, without interpretation or judgment. Practicing mindfulness involves breathing methods, guided imagery, and other practices to relax the body and mind and help reduce stress.
One study out just last month, for example, found that nearly 80% of participants experienced less stress and anxiety after a 15-minute online mindfulness meditation session. Mindfulness apps can even help with physician burnout, according to another study. So, let’s take a deep breath, relax, and bring our awareness to Calm and Headspace – two companies that we first covered a couple of years ago in an article about computerized cognitive behavioral therapy.
The Most Valuable Mindfulness Meditation App Startups
Founded in 2012 in San Francisco (of course), Calm has raised $218 million across nine rounds and nearly 40 investors, bringing the company’s valuation to about $2 billion. The most recent was a $75 million Series C last December that included investors like Goldman Sachs, venture capital firm Lightspeed Venture Partners, and Marc Benioff, CEO of Salesforce (CRM), among others. Calm offers a variety of content on its app, which it claims has been downloaded more than 100 million times, while adding 100,000 new users every day. Another fun fact: Members listened to more than a billion minutes of content, which includes celebrity voices like LeBron James and Matthew McConaughey leading meditations, as well as music by Keith Urban and Moby.
Calm has grown its paid subscribers from one million in February 2019 to about four million at the end of 2020, TechCrunch reported. The company currently offers an annual plan at $69.99 or a lifetime membership for $399.99. Unfortunately, we don’t have any insight into the split of its paying members, nor has the company released any financial details about its Calm for Business program. Companies like Lincoln, Universal, GoFundMe, and Kraft Heinz have all signed up to enable their employees access to the mindfulness meditation app, with discounts of up to 55% compared to the price of an individual plan.
Calm backs up its claims like the above with about a dozen peer-reviewed science publications, and has conducted a half-dozen clinical trials, including an ongoing study about the effects of its app on sleep quality for cancer patients.
Archrival Headspace has raised nearly an identical amount of money – $216 million across 10 rounds – from a couple dozen investors including celebrities like Ryan Seacrest, Jessica Alba, and Jared Leto. Surprisingly, Gwyneth Paltrow is not an investor. However, Headspace hasn’t officially joined the Unicorn Club, the not-so-exclusive-anymore group of startups valued at $1 billion or more. One of the VC firms backing the company through multiple rounds is an outfit called Advancit Capital, which decided to form its own blank-check company back in February. Makes you wonder if Advancit will cut a deal with one of its portfolio companies. Something to be mindful of, for sure. Headspace was co-founded in 2010 by a guy named Andy Puddicombe, a former monk whose voice is featured on the mindful meditation app’s varied content.
The company claims more than 70 million downloads, with a reported paying subscriber base of two million. Annual memberships are also $69.99. Headspace also has its own enterprise program for employers who want to keep their employees’ heads in the game, including companies like Adobe, Roche, and General Mills. Headspace also emphasizes scientific rigor. It has published more than two dozen studies that claim to show how Headspace improves areas such as stress, focus, and compassion. And it says another 65 studies are underway to further validate results through third-party research.
In 2018, Headspace made its only acquisition of a company called Alpine.AI, an artificial intelligence startup that specialized in interactive voice services. The idea was to integrate the technology to make the Headspace platform more conversational. More recently, the company started its own Netflix programming about mindfulness meditation. It stars Jared Leto as the Joker. If Headspace can help that dude chill, it can work for anybody.
There are hundreds if not a couple thousand meditation apps on the market today, but few have built powerhouse brands like Calm and Headspace. While the latter is considered the OG of online mindfulness meditation, Calm has apparently pulled ahead in terms of popularity. Business of Apps, a firm that covers the business of apps, estimates Calm revenues at $150 to $200 million, while Headspace will pull in between an estimated $100 and $150 million. Both companies have grown their businesses beyond meditation, into areas such as healthy sleep, education, and yoga-like exercises. It’s easy to imagine they could continue to grow their platforms to include technologies like virtual reality, which is being used in mental health settings. For now, retail investors are left to meditate on the possibilities if either company ever decides to go public.
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