How does Headspace make money?

Steven Loeb · October 8, 2016 · Short URL: https://vator.tv/n/477e

Headspace offers a free, limited service, but charges a fee to access all of its content

Editor's Note: Our 6th Annual Vator Splash LA conference is coming up on October 13 at the Loews Hotel in Santa Monica. Speakers include Mark Cuban (one of the hosts of Shark Tank and owner of the Dallas Mavericks); Leura Fine (Founder & CEO, Laurel & Wolf ); Nick Green (Co-Founder and Co-CEO, Thrive Market); Tri Tran (CEO & Co-founder, Munchery); Andre Haddad (CEO, Turo); and many more. Join us! REGISTER HERE.

In the last few years, there seems to have been a strong shift in the way we talk about mental health and wellness. I think you can attribute that to two different kinds of tragedy: first, the rash of shootings that have plagued the country, starting with Newtown, and, second, the suicide of Robin Williams, and the resulting backlash in how is daughter was treated on social media.

That's why this is the perfect time for Headspace to come along. It's a digital health platform, providing guided meditation sessions and mindfulness training. It contains hundreds of hours of content, which can be accessed online, or via the Headspace mobile app.

The company makes its money by selling subcription plans, either  monthly, yearly, for two years at a or forever.

The monthly plan costs $12.95 a month, while the yearly plan costs $7.99 a month. If the user pays for a  two year plan it costs $6.24 a month, and the "forever" plan, costs a flat $419.95.

Headspace does offer a free plan, which includes 10 programs, at 10 minutes each, but the paid plans offer a slew of other courses, including those involving health, performance and relationships. It also includes Healthspace SOS, which are two-minute long exercises to help users feel calm and On the Go, which helps users meditate during daily activities. 

The company is also dedicated to" improving the health and happiness of the world," so, for every Headspace subscription purchased, the company donates one to someone in need.

Founded in 2010, Headspace is currently used by more than one million people, in 150 countries.

The company has raised $38.3 million in venture funding from The Chernin Group, Advancit Capital, Allen & Company, Breyer Capital, Broadway Video Ventures, Deerfield Management, Freelands Ventures, and William Morris Endeavor as well as celebrity angel investors Jessica Alba, Cash Warren, Jared Leto, Ryan Seacrest, and LinkedIn CEO Jeff Weiner.

(Image source: headspace.com)

  • MONTHLY

    $12.95/month

  • MOST POPULAR!

    YEARLY

    $7.99/month*

  • TWO YEARS

    $6.24/month*

  • FOREVER

    $419.95*

Read more from our "What's your business model?" series

More episodes