“How often do we ponder the depths of the present moment?”
This question comes from Matthew McConaughey’s sleepy soliloquy on the popular Calm app. With a recent $27 million added by Lightspeed Venture Partners to the company's Series B extension round, Calm has officially reached unicorn status with a $1 billion valuation. This amount was tacked onto an earlier $88 million for the San Francisco-based app led by TPG Growth. Calm has now raised a total of $143 million.
Lightspeed declared the app the first mental wellness unicorn and a hub “with music, meditation and even masterclasses on everything from managing your relationships to eating in a mindful way.” Calm’s evolution happened thanks to the soothing tones of readers like McConaughey, Leona Lewis and Stephen Fry under the Sleep Stories feature.
The feature, a recent addition to the app, has received 150 million listens from 2 million paid subscribers paying $70 per year or $400 for the for-life subscription. Lightspeed put their money on Calm because they quadrupled revenues last year, but also because Nicole Quinn of Lightspeed is an adamant user.
“Calm’s sleep stories have reduced the time it takes me to nod off from 30 minutes to less than 5. That’s more than 150 hours of extra sleep every year. Thank you, Calm.”
Lightspeed also believed that Calm was pioneering audio subscription models here in the West citing the similar model used by the Chinese podcasting market. The latter of which has built a much stronger market than here in the States because Chinese consumers pay for subscriptions as they see them as necessary for self-betterment.
The app was founded by co-CEOs Michael Acton Smith and Alex Tew in 2012. Calm is the top grossing health and fitness app and 20th overall on iOS, according to App Annie, an app market data firm.
“Mental health was something people didn’t really talk about until recently. Something is changing really dramatically. There’s a societal shift of people taking care of their minds and being more interested in sleep and self-care,” co-founder and co-CEO Michael Acton Smith said in an interview with CNBC.
Calm is growing in an environment where, according to the CDC, more Americans are meditating. 14% adults said they meditated in 2017 versus 4.1% in 2012. The company has already achieved profitability largely by word of mouth.
“Our ambition is to build one of the most valuable and meaningful brands in the world,” said Tew, who serves as Calm’s co-CEO, alongside Acton Smith. “Calm is a business with a rare combination of factors: fast-growing, profitable, and positive for the world.”
Equities Contributor: Stephen L. Kanaval
Source: Equities News
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