Calm Raises $27 Million in B+ Round at $1 Billion Valuation, Eyes IPO

Recently, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that Calm announced the completion of a $27 million Series B+ financing round. This round was led by Lightspeed Venture Partners.

Calm, founded in 2012 and headquartered in San Francisco, California, developed the Calm app to help users meditate and relax. The company’s mission is to promote global happiness and health by creating a suite of digital and physical products that enhance mental well-being and address some of the most pressing mental health challenges of modern times, including anxiety, depression, insomnia, and stress.

Calm’s sleep aid feature, launched last year, has gained significant popularity, attracting 2 million paying users. The app has been downloaded over 50 million times, with a cumulative listener base exceeding 150 million. Since its inception, Calm has completed six rounds of financing, raising a total of $143 million, and its latest valuation has reached $1 billion. This most recent funding will be used to develop paid knowledge-based services and expand its portfolio of premium content products. Building on its core offering of guided meditation, Calm is creating a diverse content matrix that includes relaxing music, breathing exercises, children’s stories, and celebrity-narrated readings.

The meditation sector has captured market attention, prompting a surge of new entrants such as Headspace, Simple Habit, and Insight Timer. Consequently, it is crucial for Calm to continue expanding its appeal to users, and even more imperative for the platform to evolve into a comprehensive mental health hub.

Although this approach may compromise user experience, Calm’s extensive service offerings position it as a gateway for personal health expenditures, encompassing therapy, meditation retreats, and wellness products such as breathable apparel and yoga mats. For Calm, user subscription fees represent a significant revenue stream; this business model quadrupled its revenue in 2018 to $150 million and achieved profitability.

Since the launch of its sleep aid features, Calm has been widely embraced by users. Users can choose to have actor Matthew McConaughey narrate the wonders of the universe, have John McEnroe explain tennis rules, or listen to fairy tales such as “The Little Mermaid.” “It’s incredible to see that user engagement continues to rise, while retention rates remain exceptionally high,” said Alexia Marchetti, Director of Communications at Calm.

“Sleep stories now account for a significant proportion of the content module within the app, and the time users spend on the application has increased substantially,” said Alexia Marchetti. Many startups are attempting to manufacture user demand. However, they have failed to recognize that “sleep-onset problems are so prevalent, and market demand is so high, that a large number of users are now purchasing our paid content rather than buying sleeping pills.”

Lightspeed Venture Partners is a venture capital firm founded in 2000, headquartered in California, with offices in Beijing, Shanghai, and other cities in China.

Lightspeed Venture Partners focuses on investments in consumer, big data, Bitcoin, e-commerce, media, biotechnology, and other sectors, primarily investing in the United States, Europe, Israel, China, and India. The firm specializes in mid- to late-stage companies, mainly participating in angel rounds and debt financing for startups and growth-stage enterprises.

(Compiled by: Fan Xin)