Illustration: Aïda Amer/Axios
Meditation app maker Headspace has raised $53 million in new equity funding and another $40 million in debt.
Bottom line: Headpsace will use some of the proceeds to differentiate itself from rivals, via the development of a new product that will focus on mental health tools for patients with certain chronic diseases.
- Blisce led the equity tranche, and was joined by Waverley Capital and Times Bridge.
- Pacific Western Bank provided the debt, which Headspace raised to give it a bigger financial cushion (without additional dilution) as it works on Headspace Health, which may take a long time because of clinical research lifecycles.
Meditation app-makers continue to face questions about their effectiveness, particularly when used by employers as a substitute for addressing core causes of workplace stress.
But clearly there's a market appetite, as Headspace CEO Rich Pierson says the company's consumer business is profitable and that its enterprise business has doubled in revenue every year.
- Its app has been downloaded more than 62 million times in 190 countries, and has more than 2 million paid subscribers, and 600 employers signed up.
The bottom line: “What we’re trying to do is ask people to spend time on our product,” says Pierson. “There are only so many minutes in the day where people are willing to give you their attention.”