Calm raises $75M more at $2B valuation
Calm, a well-known meditation app, has raised new capital at a valuation of $2 billion. The round was anticipated after the company was reported to be hunting for up to $150 million at a valuation of $2.2 billion; perhaps Calm will follow in the steps of Robinhood and add a second tranche to the round in time.
Prior investor Lightspeed Venture Partners led the investment, which also saw participation from Insight, TPG and Salesforce CEO and new Slack owner Marc Benioff, among others.
That Calm was able to secure more capital is not surprising. The company has a history of quick revenue growth, and is reportedly profitable, to boot. And the investment comes after mental health-focused startups as a category have performed well from a venture capital perspective.
The coronavirus pandemic has likely also played into Calm's attractiveness as an investment. Since the beginning, researchers have warned about the psychological toll that a pandemic could have on humanity. A recent Pew Research study suggested that people who have lost their jobs during the pandemic might be feeling higher levels of distress during this time. Rival service Headspace offered an annual subscription to its platform for free for those that are unemployed.
Calm responded to the toll of coronavirus by launching a page of free resources, and focusing on a partnership with nonprofit health system Kaiser Permanente. Kaiser was the first health system to make Calm app's Premium subscription free for its members.
News that Calm seeks more funding at a higher valuation is not transcendental thinking
The startups sells a consumer service for around $70 per year, or $15 per month. And the startup has built out a corporate arm, Calm for Business," that likely brings revenue stability that augments its consumer efforts.
As part of a release concerning today's news, Calm detailed a number of nearly useful growth metrics. The service has over 100 million downloads, up from 40 million downloads in February 2019. It also grew up from 1 million paying users to 4 million paying users in the same time period (we asked if that data was inclusive of any Calm for Business customers, a question Calm did not answer).
Other TechCrunch queries regarding the company's economics, revenue growth and performance compared to its pre-COVID plan also went unanswered.
Calm and rival service Headspace have now raised a combined $434 million according to Crunchbase data, underscoring how attractive their models have proved to venture capitalists. According to a Bloomberg interview, Calm is considering acquiring smaller companies in the wake of its new capital event.
Regardless, Calm now has a refreshed war chest heading into 2021 and a plan to go hunting. That should generate a headline or two.
Mental health startups are raising spirits and venture capital