Funding your bliss: mindfulness startups scale up
The connected life is not necessarily the good life. Too often, it seems like we are squandering our time checking devices, losing touch with fellow humans and cultivating bad habits in the pursuit of instant gratification.
If only an app could fix that. Preferably, it’d be one we could use all day long and did not require interacting with humans. It’d be nice to download in a couple of minutes, too.
Welcome to the world of mindfulness and wellness apps. In the past year or so, investors have backed more than 20 startups developing apps and tools aimed at promoting mindfulness, happiness and other desirable mental states. To date, these companies have raised more than $150 million, according to Crunchbase data. Several of the largest rounds have been in recent months, with the vast majority of funding going to California-based startups.
Meditation money
Take a deep breath, and we’ll take a deeper dive into where all that money is going.
So far, the largest funding recipient is Headspace, developer of a popular app for learning meditation techniques. The Santa Monica-based company, which closed a $37 million round in June, has raised $75 million to date. It’s a fairly straightforward business model: users start with a few free lessons and subscribe if they want to keep going.
Headspace bills itself as the world’s most popular meditation app, with more than 18 million downloads. Its mission, however, is much broader.
“Meditation is just the first act,” says Ross Hoffman, Headspace’s chief business officer. Over time, the seven-year-old startup wants to build “the most comprehensive guide to health and happiness from when you’re born to when you die and everything in between.”
It’s in expansion mode, too, committed to what might be called happy scaling. The careers page features images of an open office space complete with sweater-knit upholstered sofas and blissful staffers nibbling salad and steamed rice. Job applicants are asked to explain how they see their role impacting the company vision of improving the health and happiness of the world.
There are also other well-funded startups in the space dedicated to making us feel better. Happify Health, a developer of digital tools and programs it says are “designed to motivate individuals to address the full range of their emotional needs,” has raised $25 million. And Grokker, a provider of online yoga, meditation and fitness lessons, brought in $22 million.
There are lots of other interesting-sounding companies that have raised seed and early-stage funding. The list includes Calm, a Headspace rival, Shine, an app that sends motivational text messages and Thrive Global, which wants to help busy people avoid burnout.
Where is it all going?
Initial snarkiness aside, apps geared to more balanced living do appear to fill a niche in our over-connected lives. Moreover, while there may be some irony in using devices to cure the ills of digital overstimulation, there’s also some logic.
“Technology has been the bridge that makes us more aware of everything on the planet… But it also causes us to be the multi-taskers we are and to have thousands of friends but to be lonely,” says Stuart Rudick, founding partner at Mindful Investors, a socially conscious micro VC fund. Mindful’s portfolio includes Muse, developer of a brain-sensing headband that guides wearers through meditation using changing weather sounds.
Rudick sees investor interest in mindfulness and meditation tools as an extension of the broader healthy living sector. Meditation, in particular, appears to be following a similar trajectory to that of yoga a decade or so earlier and is becoming popular with a much broader segment of the population.
From an investor perspective, yoga, fitness and healthy living deals have produced some nice returns and high valuation companies, too. Yoga apparel maker Lululemon, a former venture-backed startup that went public 10 years ago, is currently valued around $8 billion. In the unicorn space, Peloton, the company behind the spinning craze, closed its last round at a $1.25 billion valuation. (We’ve aggregated a few others here.)
There have been disappointments, as well. A recent case in point is YogaWorks, a private equity-backed yoga studio chain that has seen its stock price cut by nearly a third since its August IPO, which already debuted below the initial projected price.
Star power
Yet investors in the mindfulness space typically aren’t looking for just financial returns. Many, like Rudick, are so-called double bottom line investors, who look for companies that provide some social benefit in addition to profit potential.
Meditation and mindfulness practices are also popular in celebrity circles, which seems to have helped startups in the space secure funding from famous backers. Headspace’s investor lineup includes Ryan Seacrest, Jessica Alba and Jared Leto. Muse counts Ashton Kutcher as a backer. Thrive, meanwhile, is founded by well-known media entrepreneur Arianna Huffington.
Now, celebrity support won’t turn a laggard into a unicorn. But given how much time we spend with our devices binging on celebrity-studded content, perhaps we’d be wise to listen when these same celebrities gently suggest we take a few minutes to clear our minds.
iStockPhoto / Martin Dimitrov