Calm Raises $88 Million in Series B Funding to Expand Its Mental Wellness Platform

VCBeat (WeChat ID: vcbeat) has learned that Calm, a sleep-aid software company, recently completed an $88 million Series B financing round to build an audio content platform for stress relief and sleep assistance.

This round of financing was led by TPG Growth, with participation from Creative Artists Agency (CAA), existing investor Insight Venture Partners, and Sound Ventures. To date, Calm has raised a total of $116 million in investment, reaching a valuation of $1 billion.

Calm was co-founded by Alex Tew and Michael Acton Smith in 2012 and is headquartered in San Francisco, USA. The company’s flagship product, Calm, is a software application focused on mental health. Through a subscription model, it provides users with original audio content ranging from 3 to 25 minutes in length, helping them address mental health issues such as anxiety, excessive stress, and insomnia through various relaxation features including meditation, sleep aids, light music, and immersive scenarios. Notably, its “Sleep Stories” feature has attracted over 100 million listeners, with participation from American actor Matthew McConaughey, British actor Stephen Fry, and British singer Leona Lewis, who have all contributed to recording audio content.

As the most-downloaded sleep aid app on the App Store, Calm has amassed over 40 million downloads to date, adding an average of 75,000 new users daily. New registrants can enjoy a 7-day free trial, after which the platform charges an annual subscription fee of $59.99. For those opting for a lifetime subscription, the cost is just $299.99. Subscription fees constitute Calm’s primary revenue stream. The company reported that its annual revenue quadrupled in 2018 and is projected to reach $150 million in 2019.

Beyond its app, Calm has extended its operations offline to further accelerate its international expansion. In late 2018, Calm invested $3 million in XPresSpa, a chain of express airport spas. Meanwhile, Calm partnered with American Airlines to provide its meditation and relaxation content through the airline’s in-flight entertainment system.

Data collected by the U.S. Centers for Disease Control and Prevention (CDC) shows that one in four Americans suffers from sleep problems. Michael Acton Smith, co-founder and co-CEO of Calm, stated, “In modern society, people are facing increasing work and life pressures, leading to a growing demand for anxiety relief and emotional management. We aim to build Calm into one of the most valuable and socially impactful brands of the 21st century.”

David Trujillo, a partner at TPG, also stated, “Calm has not only redefined the concept of health but also successfully unlocked its brand potential, emerging as a leader in the broader wellness market. We are highly optimistic about Calm’s prospects.”

TPG Growth is a private equity firm headquartered in California, USA. Founded in 2007, it leverages its extensive platform resources to invest across various sectors, including media, technology, and industrials. The firm has established offices in the United States, Europe, Africa, and Asia, supporting companies through all stages of development from inception to international expansion. Currently, TPG Growth manages over $7 billion in assets.

Creative Artists Agency is a company focused on investments in the entertainment and sports sectors, primarily providing clients with strategic marketing and advisory services, and is headquartered in Los Angeles, United States.

Insight Venture Partners is an early-stage venture capital firm. Founded in 1995, it is one of the fastest-growing venture capital firms in the United States, dedicated to investing in the software and internet sectors.

Sound Ventures is a venture capital firm founded by Ashton Kutcher and Guy Oseary, focused on the technology sector and headquartered in California, United States.

(Compiled by: Feng Yutong)