Meditation app Calm hits a $250M valuation amid an explosion of interest in mindfulness apps

Meditation app Calm hits a 0M valuation amid an explosion of interest in mindfulness apps

Just a few years ago, it might have been a bit of a challenge to convince investors that a mindfulness app would end up being a big business — but thanks to an increasing focus on mental health from both startups and larger companies, companies like Calm are now capturing the excitement of investors.

From meditation sessions like you might find on other apps to tracks called “sleep stories” designed to help people get control of their sleep, Calm serves as a suite of content for users focusing on mental wellness. It’s one of an increasingly hot space centered around mental wellness and maintaining a sort of mindfulness in the hope that it’ll convert into a daily habit and help people just generally feel, well, more calm. The company says it has raised $27 million in a new financing round that values it at a $250 million pre-money led by Insight Venture Partners with Ashton Kutcher’s Sound Ventures also participating. Before this, Calm raised around $1.5 million in seed funding.

“There’s definitely a bias toward the physical body in fitness,” co-founder Michael Acton Smith said. “For a long time there’s been a certain amount of embarrassment and shame talking about our own feelings. A lot of people are realizing that we’re all, at different times, going through tough times. I think that’s part of the culture we’ve grown up in. Everything’s been about improving the efficiency and improving the effectiveness and the external circumstances. We haven’t considered the internal circumstances the same way. The same thing isn’t true of eastern philosophies. This crossover is just beginning to happen in a big way.”

Calm, at its core, is a hub of content centered around mindfulness ranging from in-the-moment sessions to tracks that are designed to soothing enough to help people get ready to go to sleep. Everything boils down to trying to help teach users mindfulness, which is in of itself a skill that requires training, co-founder Alex Tew said. This itself has morphed into a business in of itself, with the company generating $22 million in revenue in 2017 and reaching an annual revenue run rate of $75 million.

And the more content the company creates, and the more people come back, the more data it acquires on what’s working and what isn’t. Like any other tech tool or service, some of the content resonates with users and some doesn’t, and the startup looks to employ the same rigor that many other companies with a heavy testing culture to ensure that the experience is simple for users that will jump in and jump out. For example, it turns out a voice named Eric reading stories about being on a train struck a chord with users — so the company invested more in Eric.

“It’s a tricky balance,” Tew said. “Sometimes we’ll launch things that we think are popular but don’t end up being popular, but there’s never been any kind of dramatic errors. We try to create content that will appeal to the biggest range of users. We speak to our customers and find out what they would like.”

Calm’s focus is built off of an increasingly important topic the technology industry is grappling with — mental health. As more and more users pick up Calm and start listening to the tracks, the company can start to figure out what kinds of sessions or tools are helping people want to come back more often and, in theory, start feeling better with those kinds of practices. If you talk to investors in the valley, helping founders manage the highs and lows of starting a company is increasingly part of the discussion, with the refrain that ‘people are at least talking about it now’ showing up more and more often. That’s also helping companies like Calm and Headspace attract funding from the venture community.

“It does feel like a major societal shift,” Acton Smith said. “Just a few years ago no one talked about mental health, it was very much in the shadows. As more politicians talk about it, as the media treat it as something normal and healthy to do, more and more people step out of the shadows and into the light. We realize the brain is pretty much the most complex thing in the known universe, it’s not surprising it goes wrong every now and then. To be able to talk about that and understand it is a very healthy and positive thing. It just feels like we’re at the start, 50 years ago the wave began around physical fitness, jogging, aerobics, and now we’re at the start of this new wave.

Calm and other mindfulness apps are not the only companies at play here. Indeed, the two largest direct owners of smartphone platforms — Apple and Google — this year announced a suite of tools geared toward trying to manage the amount of time users end up glued to their screens. While those are centered around helping users manage their time on their phones, it does show that even the largest companies in the world are increasingly aware of the potential negative effects their devices may have spawned from people spending all their time on their phones.

But by extension, Calm is not the only app where people can throw on some headphones and listen to a soothing voice with a British accent. Headspace is another obvious player in the space, having also raised a substantial amount of funding. Tew said the goal is to remain focused on simplicity, which in the end will keep people coming back over and over — and then end up continuing to drive that business.

“There was a lot of skepticism around Calm and this category as recently as a year ago,” Acton Smith said.” People were concerned that there was a lot of competition, and wondered whether people would really pay for this. We’ve quite convincingly shown we’ve answered all those questions with the growth we’ve had in our user numbers and our revenue. This is a successful business with very high margins and a huge addressable market. If you think about Nike, and the physical exercise boom being worth tens of billions, there’s no reason why mental wellness won’t be.”

Source: Mobile – Techcruch

Lyra Health raises $45M to create a smart network for treating mental health problems

Lyra Health raises M to create a smart network for treating mental health problems

Treating issues with mental health can be a daunting and very sensitive task for anyone that is suffering from any kind of mental illness — but the problem for many is that a lot of patients just don’t know where to start, according to David Ebersman.

That’s where Lyra Health hopes to help. The service works with employers to offer a tool to their employees that helps them securely and confidentially begin to understand what kind of treatment they need to seek if they feel like they are suffering from any mental health problems. Employers naturally have a stake in this as they want their employees to stay health, but the goal is to offer a sort of safe space where users can benefit from years of growth in pattern matching and data to help them figure out where to start. The company said it has raised $45 million in a new financing round including Tenaya Capital, Glynn Capital Partners, Crown Ventures, and Casdin Capital. Existing investors that include Greylock Partners, Venrock, and Providence Ventures also participated in the funding round.

“We felt it was important to build an offering that would be helpful to all of the people who work at these companies and are suffering from a mental health condition like depression, or anxiety, or substance abuse,” Ebersman said. “A lot of the people we want to help don’t know where they’re starting. Trying to build and market something narrowly to a subset of the audience requires the audience to know they’re in that subset. Trying to build something more welcoming and engaging for a broader set of conditions felt to us to be a realistic response to the fact that not everyone can self identify. Fortunately technology really helps us with this — we can build a secure and confidential place where an employee can go and answer some questions that relate to their symptoms, severity, treatment preferences and use technology to match them for the right care.”

Lyra Health first starts off working with employers to figure out a plan to communicate to employees that the tool actually exists. But that’s one of the biggest challenges, as mental health issues — like anxiety or depression — can be very sensitive subjects for employees. Lyra Health has to work with employers to convince to give them confidence to explore it as a safe and confidential place, where they can put in information about some of their symptoms while feeling like that information is going to be locked down.

From there, Lyra takes a close look at that data and then build a set of recommendations for the patients based on what they think some of their symptoms correlate to. Lyra Health has a network of around 2,500 therapists, most of which don’t participate in traditional health plans, Ebersman said. Lyra Health then connects patients with those therapists, and they can schedule the appointment online and get started right away. Lyra Health then periodically checks in with the patients to see how they are doing and ensuring they feel like they are getting better — another data point that helps the company figure out if its recommendations are working.

“We really believed that the experience that we give to patients today could be dramatically improved,” Ebersman said. “This is part of the healthcare system that’s really hard to understand, it’s hard to navigate, and there are a bunch of different types of solutions for a variety of different conditions. We felt that trying to build a comprehensive solution that would make it easy for clients to find the care that was matched correctly to their needs and preferences was a tech problem we could start grappling right away.”

Ebersman previously oversaw the initial public offering of Facebook as its CFO, but the challenge Lyra Health entails is one that may be just as complex. Not only does the company have to establish and maintain that network of high-quality doctors and therapists, it also has to ensure that it builds and maintains a robust data set that ensures that its recommendations are actually on point — and get better over time. If it ends up as a bad product, employees won’t use it, and the recommendations can’t improve at any point. And amid all of this, the experience has to feel like a good and approachable one, even though it’s partially tackled through machine learning.

“I think we are able to successfully communicate to employees what Lyra does in a way that doesn’t seem intimidating or stigmatized,” Ebersman said. “I think the experience of exploring what your care options are using technology is a little easier for people. I think there are places where technology plays a critical role in this journey. One is creating a safe environment where you can dip your toe in the water. I also think a technology based experience can give you confidence that the best care for what you need is out there. I do believe that for most people in the care journey, interacting with a human who is warm and who you can relate to, and who has skills to help you, improve is an important piece. But if you think comprehensively from the beginning to the end of someone’s care journey, there’s a critical set of roles technology can play to ensure that more people engage and have a better experience.”

Ebersman hopes Lyra Health is riding a wave of increased awareness and attention for mental health. That could encompass anything from apps like Lyra Health to companies that are focusing on wellness like meditation apps like Calm (which is reportedly valued over $250 million). All of these companies have been able to raise pretty significant rounds of financing, but it also means that there will be a lot of activity — and a bit of a race to get adoption and build up the kind of robust data sets you need to have a formal defensibility in the marketplace. There are other approaches to mental health like Huddle, but the trick will be figuring out how to get people on board and spin up that flywheel that will make the experience better and better.

” Many people with mental health conditions don’t ever engage with the system, or if they do, are quickly intimidated with how confusing and frustrating it can be,” he said. “We believe if we build a simple and warm tech-based experience that’s confidential and secure, we can get more people engaged with the mental health system. Our engagements are about seven times higher than the companies were seeing with the solutions they had before they launched Lyra.”

Source: Mobile – Techcruch