Same Company buys mental health apps, Two fast-growing companies are joining forces.
They announced on Wednesday that the digital health unicorns Headspace and Ginger will merge to form a $3 billion entity.
The deal combines Headspace’s app-based meditation and practice with Ginger’s text-based tutoring and remote therapy access. CeCe Morken, CEO of Headspace, said the two companies are very suitable because their services and culture complement each other.
“We recognize that if someone needs to talk to someone and needs more help than we can provide, what would we miss?” she said in an interview with MedCity News. “We looked at the various companies there and we really like the products Ginger offers. Their focus is also on making it affordable for everyone, which is important to us.”
Although mental health applications were an important investment target before the pandemic, more and more companies have adopted these tools in the past two years. Moken said that part of the reason Headspace considered the deal was because their corporate customers were interested.
Headspace is piloting this idea by providing access to therapists through its platform. In the first 10 weeks, the attendance of meetings with Headspace Care therapists increased by 1,253% compared to those who received treatment through the pilot company’s EAP provider.
“We were very pleasantly surprised by the results,” she said.
Although the combined company will be called Headspace Health, its structure is an equal merger. Both companies have existed for about ten years, and they have raised similar funds from investors. To date, Headspace has raised a total of US$216 million, while Ginger has raised approximately US$220.7 million. According to Crunchbase.
The two companies will simply merge their cap tables and will not exchange additional funds. Morken will serve as President of Headspace Health, and Ginger CEO Russell Glass will become CEO of the new company. Each of them will get the same number of board seats.
Headspace Health is expected to have 800 to 1,000 employees and more than 2,700 corporate and health plan customers. The transaction is expected to be completed later this year.
Although Headspace and Ginger are still fine-tuning how their platforms work together, they hope to train Ginger’s therapists on the Headspace platform and identify existing customers who may be interested in each other’s services. With Headspace’s global influence, there will also be opportunities to expand Ginger’s footprint.
“It is very important for us to make these two products very robust, because they both address different needs,” Morken said.
These two companies are not the only companies that have cooperated. Several digital health companies have recently expanded their mental health services, usually through acquisitions or partnerships. last month, Amwell acquires SilverCloud Health, Provide mental health and welfare programs. In 2020, remote treatment starts Lyra works with Calm, a meditation app.
Photo credit: Bohdan Skrypnyk, Getty Images
