Mental wellness app Calm is the latest digital mental health company to announce workforce reductions.
Co-CEO David Ko wrote in a memo that 20% of its employees, or about 90 people, were let go, according to a report by The Wall Street Journal.
The move came after Calm management reexamined the “investment thesis” behind every project at the company, the Journal reports.
Calm was founded in 2012 and provides services designed to help improve sleep patterns, develop mindfulness and reduce stress. It rode a wave of venture capital to unicorn status three years ago. In February 2019, it raised an $88 million Series B funding round that valued the company at $1 billion. Calm proclaimed itself the “world’s first mental health unicorn.” Calm raised $218 million of total investment, according to Crunchbase.
Other digital-focused companies implementing layoffs include Circulo, Foresight Mental Health, and Cerebral. Consumers and investors have begun to cool on digital mental health apps. Mental health app downloads have declined by more than 30% since January of 2021, according to apptopia.
The dynamics in digital mental health are primed for more uncertainty. There’s been a greater expectation that startups would begin to consolidate their operations to build more expansive companies in terms of scale or diversity of offerings.
In February, Calm acquired health tech company Ripple Health Group, a move toward more sophisticated health care offerings rather than just mindfulness practices. Ko became co-CEO through the deal.
Also based in San Francisco Ripple provides health care services aimed at older adults and their caregivers. These include LikePaper, which tracks medications and stores health documents, as well as CareMemo, which connects users to care teams to coordinate health services and for keeping abreast of wellness goals.
Along with the purchase of Ripple, Calm announced that it is replacing its current employer wellness offering – Calm for Business – with a new mental health service called Calm Health. The offering has over 2,000 employer partners and covers more than 20 million individuals.
This isn’t the only company on the market with digital wellness offerings and health care services. Headspace Health was born out of a deal with a comparable focus on adding health care services to a mindfulness platform. Part of the appeal of pairing consumer-focused mindfulness apps with digital mental health services is that wider-spread mindfulness is seen as a way to get upstream of mental health issues in the first place.
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