Calm Raises $75M at $2 Billion Valuation - Digital Health News

Calm, a popular application focused on meditation, has successfully obtained additional funding, resulting in a company valuation of $2 billion. This funding round was expected following reports that the company was seeking up to $150 million with a valuation reaching $2.2 billion; it’s possible Calm may, like Robinhood, expand the round with a subsequent phase of investment.

Lightspeed Venture Partners, an existing investor, spearheaded the investment. Additional participation came from Insight, TPG, and Marc Benioff, the CEO of Salesforce and recent owner of Slack, among other investors.

Calm’s ability to attract further investment isn't unexpected. The company has consistently demonstrated rapid revenue expansion and is also reported to be operating profitably. This investment also follows a trend of strong performance within the venture capital landscape for companies concentrating on mental health.

The coronavirus pandemic has likely contributed to Calm’s appeal as an investment opportunity. From the outset, experts have cautioned about the potential psychological impact of a pandemic on the population. A recent study conducted by Pew Research indicated that individuals who have experienced job loss during the pandemic may be experiencing increased levels of emotional distress. Competitor Headspace previously provided complimentary annual subscriptions to its platform for unemployed individuals.

Calm addressed the challenges presented by the coronavirus by creating a dedicated page offering free resources and prioritizing a collaboration with Kaiser Permanente, a nonprofit health system. Kaiser Permanente was the first health organization to provide its members with free access to Calm’s Premium subscription.

The company offers a direct-to-consumer service priced at approximately $70 annually, or $15 monthly. In addition, Calm has developed a business-focused division, “Calm for Business,” which likely contributes to revenue stability alongside its consumer offerings.

As part of a statement released with today’s announcement, Calm shared several noteworthy growth statistics. The application has surpassed 100 million downloads, an increase from 40 million downloads in February 2019. The number of paying users also grew from 1 million to 4 million during the same period (we inquired whether this figure included customers utilizing Calm for Business, but Calm did not provide a response).

Further inquiries made to TechCrunch regarding the company’s financial performance, revenue growth, and comparison to pre-COVID projections also remained unanswered.

Calm and its competitor Headspace have collectively raised $434 million, as indicated by Crunchbase data, highlighting the attractiveness of their business models to venture capitalists. According to a Bloomberg report, Calm is exploring the possibility of acquiring smaller companies following this new funding round.

With a renewed influx of capital and a strategic plan in place, Calm is well-positioned heading into 2021 and is actively seeking new opportunities. This is likely to result in further news and developments.