Meditation App Headspace to Merge With Blackstone-Backed Ginger to Form Mental Health Powerhouse: What Does It Mean For You?
For the sake of sounding cliche, it's impossible to not talk about mental health in this day and age.
Between August 2020 and February 2021, the percentage of adults with recent symptoms of anxiety or a depressive disorder increased from 36.4% to 41.5%, and the percentage of those reporting unmet mental health care needs increased from 9.2% to 11.7% (CDC).
Between January and September 2020, the number of people who took an online anxiety screening with Mental Health America, a mental-health advocacy nonprofit that also offers services, increased 93% over the total number of anxiety screens taken in 2019. Depression screenings during the same period grew 62% over total 2019 depression screens.
The venture world has been taking notice of the increasing need for mentally conscious businesses. In 2020 alone, mental health startup funding was 5.5 times the $275 million investors allocated four years earlier, according to CB Insights. And in this quarter, mental health firms raised a record $576 million, 60 percent more than any previous quarter, despite the trend of a declining worldwide economy.
This year, Lyra Health raised $187 million, putting its valuation north of $2 billion. Calm, a competitor to Headspace, raised $75 million at the end of 2020, putting its valuation over $2 billion, according to Pitchbook data.
In 2020 alone, mental health startup funding was 5.5 times the $275 million investors allocated four years earlier.
Mental health is no longer the elephant in the room, it's the belly of the whale we've all found ourselves in. At the forefront of the expedition out is mentally conscious companies built around destigmatizing mental health and making treatment and information accessible.
Mental health is no longer the elephant in the room, it's the belly of the whale we've all found ourselves in.
That's part of what makes this news so exciting and revolutionary in the mental health space.
Yesterday it was announced that Ginger, the Blackstoned-backed mental-health platform that's equipt with coaching, therapy, and psychiatry service will merge with Headspace, the popular meditation app that has dominated the market since 2011. Together they will launch Headspace Health, the world’s most accessible, comprehensive digital mental health platform.
In their announcement, CeCe Morken, CEO of Headspace, relayed, “We are witnessing a mental health crisis unlike anything we’ve experienced in our lifetimes, yet the majority of mental healthcare today is neither broadly accessible nor affordable. Together, as Headspace Health, we will address the systemic challenges of access and affordability in a fundamentally different way by creating the world’s most holistic, scalable, and effective mental health and wellbeing company.”
Why is that important?
The combined entity is projected to reach nearly 100 million people across 190+ countries through direct-to-consumer business and 2,700+ enterprise and health plan partners around the globe.
In the past year, therapy app developers were rushing to meet waves of new users, which opened up conversations about privacy and efficacy during the COVID-19 pandemic. After all, App stores host nearly 20,000 mental health apps, according to the American Psychological Association. Could these apps build the infrastructure to support a flood of first-time patients and existing patients who could no longer see professionals in person?
Headspace and Ginger have arguably solved many of those problems with their merger. By coming together during this pivotal moment, Headspace Health will equalize mental healthcare by providing the full spectrum of affordable and comprehensive support for everyone. Their combined expertise in the consumer market, evidence-based interventions, and technology will help improve resilience, reduce stress, and provide treatment to the millions of people experiencing mental health symptoms, from anxiety to depression to more complex diagnoses.
In plain English, as a former-virtual-therapy-app-user, that makes me very excited. Everything I found fault within my former services seems to be taken care of and accounted for in Headspace Health.
Why This Merger Will Work
Since the beginnings, Headspace and Ginger have relied on research and evidence to drive the development of their products and services to deliver tools and interventions rooted in behavioral science, while maintaining a stigma-free environment for users and professionals.
- In over 25 published studies in leading mindfulness peer-reviewed journals, Headspace has been shown to produce favorable outcomes of interventions, including
- A published study conducted at Google and Roche showed that eight weeks of Headspace resulted in a 31% decrease in anxiety symptoms and a 46% decrease in depressive symptoms among healthy adults.
- Ginger’s on-demand, team-based care model, which includes behavioral health coaching, therapy, and psychiatry, has been shown to produce an average of 59% improvement in
- Ginger has built one of the world’s largest mental health data sets through its Mood Matters study
- , having conducted research with eight of the top 10 academic medical centers in the U.S. and over 40 medical institutions nationwide. This data, combined with Ginger’s internal studies and data-driven quality assurance program, help Ginger to continually improve the high standard of care they deliver, at scale.
- On average, Ginger members rate their coaching, therapy, and psychiatry sessions 4.7/5.0 stars.
- Viacom/CBS, Delta Air Lines, Sephora, and nearly 700 other leading employers rely on Ginger to provide on-demand mental healthcare to their employees.
- Ginger is reimbursed as a virtual in-network benefit through fully-insured, self-insured, and government-funded programs, such as Cigna and AmeriHealth Caritas District of Columbia, a Medicaid program.
- Headspace partners with companies across the healthcare ecosystem including Bright HealthCare and Solera Health, which distributes Headspace to leading regional health plans through their Mental Health and Stress solution. Through these partnerships, the cost of Headspace is fully covered.
The VC Side
In March, Ginger scored $100 million in Series E funding. Which came just a year after the company closed a $50 million Series D round. The company has quality partnerships to pull from, including one with digital pharmacy Capsule, which allows Ginger patients to get same-day delivery for mental health medications.
Headspace in 2020 earned just over $100 million in its Series C funding round. The company also secured a deal with Netflix in 2020 for a new television show aimed at helping viewers meditate and practice mindfulness.
Combined, Headspace Health projects gross sales of $300 million in bookings by the end of 2021.
What's Next For The Merger?
When the merger is closed, Russell Glass, CEO of Ginger, will take on the role of CEO of Headspace Health. CeCe Morken will remain CEO of Headspace and take on the additional role of President for the combined entity. This transaction is subject to regulatory approval and customary closing conditions and is expected to close in the last quarter of 2021. The terms of the transaction were not publicly disclosed.