Mental wellness platform Headspace raises $93M Series C

Headspace will use the funding to build out its B2B program, which now works with 600 companies

As the conversation around mental health and wellness has evolved over the last few years, leading to more acceptance and destigmatization, many, many startups have come along to try to take advantage of these trends, to the point where there are nearly 1,000 of them now to choose from.

Of course, a few companies are bound to rise to the top and one that has emerged as a leader is Headspace, a digital health platform that provides its users with guided meditation sessions and mindfulness training. On Wednesday, the company announced new funding that should help solidify its position in the space.

The $93 million Series C round was led by blisce/, with participation from Waverley Capital and Times Bridge, the global investments and partnerships arm of The Times Group of India. Existing investors, including the Chernin Group, Spectrum Equity and Advancit Capital, also participated. Of the total round, $53 million came from participating investors, while the other $40 million came in the form of debt capital from Pacific Western Bank.

To date, Headspace has raised a total of $163.7 million, including $36.7 million in June 2017 as part of Series B, and $34 million in September 2015.

The Headspace platform contains hundreds of hours of content on topics that range from stress to movement to sleep, which can be accessed online, or via the Headspace mobile app. It also provides services like Headspace SOS, which are two-minute long exercises to help users feel calm and Headspace On the Go, which helps users meditate during daily activities. 

Since being founded in 2010, Headspace has seen over 62 million downloads in 190 countries. It now has over 2 million paid subscribers.

"We believe that mindfulness should encompass every aspect of life, not just when you’re sitting to meditate. So, in addition to guided meditations, members have access to eyes-open exercises, such as mindful walks and runs, breathing and wind-down exercises, sleepcasts, soundscapes and more," Megan Jones Bell, Chief Science Officer at Headspace, told VatorNews.

(Note: Bell will be a speaker at the Future of Behavior and Mental Health salon, held by Vator, HP and UCSF Health Hub, in March. Get tickets here)

Part of the funding will go toward building out some of Headspace's product segments, including Headspace for Work, its B2B business.

The program uses admins, who are typically benefits or people leaders within the company, who are provided with a suite of products, including a provisioning portal, resource toolkit, qualitative and quantitative measurement tools. Those admins then make those products available to eligible employees. In addition, Headspace for Work members also get access to features and content that are specifically designed for that program, including in-app team challenges. 

Headspace works closely with the admins to create a mental health strategy for the company and its employees.  

"Our Customer Success Team partners closely with each company to build unique implementation and engagement plans. Our dedicated team of experts travel around the globe to deliver immersive live, or virtual, educational experiences for teams to help them integrate mindfulness into their routines," Bell said.

The goal of the program, she told me, is to "help companies build healthier, more productive cultures and higher performing organizations," and so Headspace is "constantly looking for new ways to bring more value to our members."

"At the end of the day we want to ensure we’re helping our members create healthy routines, whether that’s through our app, the work we do with hundreds of employers or through partnering with healthcare providers as we work to deliver better access."

Headspace for Work now has more than 600 corporate customers, including Starbucks, Adobe, Hyatt and GE. The company works with 15 percent of Fortune 100 and 20 percent of Fortune 50 companies. The Headspace for Work segment saw its revenue double year-to-year in 2017, 2018 and 2019; the company is expecting to see the same growth in 2020.

In addition to investing in Headspace for Work, the company will also continue to put money into Headspace Health, the company's program where it integrates mindfulness into healthcare.

"Headspace Health takes a human-centered design approach in which we put patients and healthcare professionals at the center of our design process," said Bell.

"We are focused on driving meaningful clinical outcomes and helping patients create healthy routines. We are keenly aware of the need to look at the patient in a holistic way. Our programs are specifically designed for those suffering from a broad range of stress­-related chronic diseases, furthering Headspace’s commitment to improving the health and happiness of the world."

Headspace Health is a relatively new segment for the company, having only been unveiled in June of 2018, so the company is still undergoing clinical testing and finding processes that will allow it bring a product to market that meets the needs of its customers.

"Headspace is a global leader in mindfulness created with one mission in mind: to improve the health and happiness of the world. And in order to do that, we need to reach as many people as possible. One route to accomplishing this has been working within the healthcare system –  partnering with insurance companies, healthcare professionals, and centers of care," said Bell.

"As we’ve grown these partnerships, we’ve learned firsthand how our existing consumer app is both recommended by physicians and used by patients as a helping hand in a variety of mental as well as physical conditions. We’re excited to double down on our investment in healthcare by setting out to create new digital therapeutic products to help patients manage illnesses."

Finally, the money will go towards Headspace's international expansion. Last year, the company launched localized versions of the app in French and German, and also hired former Apple executive Renate Nyborg as Head of Europe to lead that expansion in. The company also launched Latin American Spanish and Brazilian Portuguese.

The investment from The Times of India will help Headspace continue its expansion in Asia going forward.

(Image source: headspace.com)