Headspace Health acquires new wellness app while Calm lays off some of its workforce

Article by Erum Ahmed | Sep 9, 2022

The news: Digital mental health and wellness platform Headspace Health acquired wellness app Shine. The latter app offers over 45,000 subscribers self-guided content like daily meditations, self-care courses, and personalized support.

Meditation apps sink or swim: Headspace Health is holding its head above water, while competitors like Calm flounder.

In August, wellness app Calm laid off 20% of its staff including approximately a dozen roles in its consumer marketing department, per WSJ. One laid-off employee said company leadership cited macroeconomic trends as the reason for the layoffs.

High operating costs could have also contributed to Calm’s cuts. In February, Calm acquired health tech company Ripple Health Group to replace its existing employer offering (Calm for Business) and rebrand it as Calm Health.

On the other hand, Headspace Health—a top competitor of Calm with a very similar product—signals it’s doing well with its Shine acquisition. For context, both Calm and Headspace Health account for 90% of active mental health app users.

The larger trend: The number of adults flocking to meditation apps like Headspace surged over the past two years.

In Q2 2020, only 12% of US adults said they used mindfulness and mediation apps, according to CivicScience’s 2022 Trend Adoption Tracker. That figure climbed to 19% of US adults by Q4’21 alone.
Plus, it’s likely the number of meditation app users isn’t dropping anytime soon. US adults are interested in adopting apps for mental health use cases.

The challenge: keeping patients on board.

Some mental health and mediation services have high out-of-pocket costs that could deter patients from coming back.
Apps like Headspace Health appeal to cost-conscious consumers by offering a low-priced monthly plan at $12.99, for instance.
Meanwhile, meditation apps like Aura only offer yearly subscriptions starting at nearly $60 per year.