Headspace Business Model | How Does Headspace Make Money?

Headspace is a mindfulness application with an intuitive UI that demystifies and intimidates meditation.

TechCrunch reports that Headspace is the second most downloaded mindfulness app worldwide behind Calm, with millions of downloads.

The free edition of the program only includes 10 classes of three to ten minutes each and only offers access to the “Meditation Basics” practice. 

Headspace Business Model is based on three different aspects from which it generates revenue. They are Consumer Applications, B2B Solutions, and Headspace Health.

You must pay the price if you wish to truly comprehend what Headspace is all about and unlock its essential functions.

Individuals who opt not to commit to an annual purchase have the option of making payments monthly. You will save more money if you choose to purchase the yearly package if you plan to use the application for a long time.

An ex-Buddhist monk who narrates the guided meditations is Andy Puddicombe, who founded the app. Meditation is rooted in the eastern Buddhist tradition, but Headspace isn’t affiliated with any particular religion.

What is Headspace?

Headspace is a smartphone application that teaches people around the world how to meditate and practice mindfulness. You can download Headspace for iOS or Android devices.

Headspace’s business plan is built on three revenue sources. Consumers pay a membership fee to access meditation content; business owners pay to implement mindfulness programs for their employees; and Headspace Health, an FDA-approved wellness program.

Headspace Business Model

Former marketing director and Buddhist monks founded the model, which has proved to be successful. 

Headspace raised about $170 million in venture capital, and it has been downloaded more than 62 million times in 190 countries.

Company NameHeadspace
Company TypePrivate
FoundersAndy Puddicombe
Richard Pierson
ProductMeditation and mindfulness App
Founded DateMay 2010
HeadquarterMichigan Avenue, Santa Monica, California, United States
Area ServedWorldwide
WebsiteVisit Website
Headspace Wikipedia

How Does Headspace Work?

The Headspace app is relatively straightforward in its operation. After creating an account, the user can select from a collection of meditation lectures. 

These include stress and anxiety, personal development, and improved sleep. Allow Andy Puddicombe, one of Headspace’s co-founders, to describe the software in his overly soothing tone:

Users can choose to complete an entire course or only a class, depending on their time constraints and personal objectives.

Additionally, Headspace allows users to communicate with one another via live group meditation.

Headspace has a vast and diverse library of meditations on topics ranging from job stress to anxiety, as well as sessions devoted to coping with specific emotions such as loneliness and rage.

Numerous mediations are recorded in two distinct voices, one male and one female. Andy Puddicombe, the app’s co-founder, provides the male voice. 

One of my favorite aspects of his meditation technique and Headspace, in general, is the acceptance and cheerful counsel he provides. 

The sessions do not make users feel awful for becoming sidetracked, which is nearly often the case for newcomers. 

Puddicombe agrees that it occurs and offers suggestions for coping with a wandering mind. 

These tips are highlighted in the free version’s “Basics” course, so you may determine whether this aspect of Puddicombe’s method appeals to you before committing.

The sessions do not make users feel awful for becoming sidetracked, which is nearly often the case for newcomers.

While other meditation applications allow users to choose between longer and shorter sessions, Headspace users can adjust the duration of practically any session before they begin. 

Therefore, if you’re interested in the “Listening to Others Meditation” session but only have five minutes available, you can choose the duration (three, five, or ten minutes) that works best for you. 

Other meditations go up to 20 minutes, but users nearly always have the option of a shorter duration.

I never slept off during daytime sessions, which became an issue with other meditation applications I tried. 

My eyes began to close on one occasion regardless of how I meditated—lying down, sitting, or on the sofa. I found the sessions excellent without being so restful (or monotonous) that I dozed off.

The program instructs users on eight different types of meditation, ranging from body scanning to focused attention and reflection. I discovered that some strategies require fewer sessions than others. 

Headspace Business Model

I could only locate one conclusive body scan, which begins with the head or toes and progresses upward or downward. Additionally, the session’s maximum duration was three minutes. 

Body scans are incorporated into several nightly wind-down sessions, as I learned as I attempted more sessions; I simply wish they were more easily accessible via a search for the keyword “body scan.”

Regardless of approach, the great majority of meditations I attempted were breath-focused. This meditation is beneficial for many people, as breathing is a universal feeling and a manageable action. 

However, these meditations may exacerbate the condition for some people, such as those who experience anxiety as chest tightness.

How Does Headspace Make Money?

Headspace earns money by providing subscription plans that can be purchased monthly, annually, for two years at a time, or indefinitely.

Monthly plans start at $12.95 per month, while annual plans start at $7.99 per month. A two-year plan is $6.24 a month, while the “lifetime” option is a flat $419.95.

The free plan of Headspace consists of ten 10-minute courses, while the subscription plans include courses on health, performance, and relationships. 

It also features Healthspace SOS, which includes exercises that help users relax for two minutes. Users of On the Go can meditate while working or taking care of their children.

Additionally, Headspace is devoted to “enhancing the wellbeing of the world” and distributes a subscription to someone in need for every one purchased.

Headspace Business Model

Headspace business model operates in three primary business segments: the consumer channel via the app, business-to-business solutions delivering corporate wellness programs, and healthcare, where the company is now awaiting FDA approval.

Consumer Application

Headspace’s primary revenue stream is its app and B2C offerings. You can download the software for free and access the introductory classes. 

Paying a subscription price will allow you to examine all content on the site. Headspace’s current offering looks like this.

Headspace’s other products include live group meditation, in addition to the personal mediation option. You can download the app from either the Apple App Store or Google Play Store.

B2B Solutions

The Business-to-Business program of Headspace also makes the app available. 

The price is not released publicly and is most likely based on the contract’s size (the number of employees utilizing the system).

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Headspace offers three tiers of service: starter, premium, and enterprise. The most advanced program, Enterprise, provides the following benefits to organizations:

  • The customer success manager is committed to you.
  • You can create your virtual events.
  • Impact assessments.
  • Education webinars for employees.

The app remains accessible to each subscriber as a result. Some of Adobe’s corporate partners include Airbnb, Spotify, and Adobe.

Headspace Health

Headspace Health, the third and final revenue source, was launched just lately and is still awaiting FDA approval. 

It planned to launch the world’s first prescription meditation app in 2020. The company has previously developed and clinically validated a portfolio of meditation programs for a broad spectrum of chronic conditions.

Headspace Business Model

The intended debut date is set for 2020, depending on the approval process’s speed. Headspace is far from a rookie when it comes to researching the advantages of meditation. 

The organization has conducted more than 65 research studies since 2015, working with academic partners such as Harvard University and the United Kingdom’s National Health Service (NHS).

What is the Funding and Valuation of Headspace?

Crushbase reports that Headspace has raised about $170 million in venture capital so far. 

Series C financing amounting to $53 million (combined with debt financing of $40 million) was the latest round of financing for the company. Spectrum Equity, Breyer Capital, Advancit Capital, and Jeff Weiner are some of the investors.

The company declined to divulge its most recent valuation, but it was valued at $320 million in its Series B financing.

More than 2 million customers in 190 countries have downloaded the software, accumulating over 62 million downloads.

What is the Revenue and User Base of Headspace?

The company has gathered over 62 million downloads, 30 million userbases, and over 2 million paying customers in 190 countries as of August 2021.

The financial performance indicators of Headspace are not required to be disclosed as a private company. The revenue estimates are purely speculative, therefore. 

Headspace earns approximately $10 million every quarter, according to Sensortower. The company is estimated to have generated over $100 million in user spending by May 2019.

Success Story of Headspace

You’ve probably heard the adage “preach what you preach.” The truth couldn’t be further from the truth about Headspace.

Andy Puddicombe and Rich Pierson launched the app in 2010, with Puddicombe narrating most of the stories. 

The story began in the early 1980s when Andy’s parents divorced, prompting the teenager to practice contemplative activities.

Andy suffered a devastating event a few years later when he was 18. An intoxicated driver struck his friends as they were drinking one Christmas Eve, resulting in the deaths of two of his friends.

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Andy dropped out of college four years later as a result of these events. He traveled to Southeast Asia at the age of 22 to become a Buddhist monk. 

The London-born Andy returned to the UK to study circus arts after spending a year on retreat in Russia.

He met a fellow circus artist in Moskau who informed him about the prospect of studying the subject. 

He discovered a loophole in the British system that allowed government funding for study fees and living expenses due to being denied exercise and possessions (monks don’t own anything).

This enabled Andy to resume physical activity (an avid rugby player during his adolescent years) and teach his mindful meditation lessons to a bigger audience in the United Kingdom.

Richard Pierson, a young marketer, experienced severe anxiety and stress in 2008 while working at advertising agency Bartle Bogle Hegarty and drinking excessively with coworkers.

He abandoned his job to study acupuncture after becoming dissatisfied with his employment and life. 

To finance his schooling, he continued to work on freelance advertising jobs. He made contact with Andy through a common contact.

Andy agreed to help Rich with his anxieties in exchange for advertising Andy’s meditation business. 

The two first began with an event business, selling tickets to live meditation practices and similar events.

The couple decided to create a ten-week course based on Andy’s lessons to expand their offerings while keeping up with strong client demand. 

Headspace had a successful partnership with Virgin Atlantic, where its content was offered on the airline’s flights, and with The Guardian, where a comprehensive guide to mindfulness meditation was launched. Now, there was a better thing coming.

The headspace app was therefore introduced in 2012 as an initial version. The firm has grown steadily since then. 

Headspace now employs over 300 employees across three locations in London, San Francisco, and Los Angeles. 

Among their well-known admirers and consumers are LeBron James and Ryan Reynolds.

Andy and Rich both remain active in the business. While Rich serves as interim CEO, Andy assists in creating new material and disseminating Headspace’s messages.

Key Takeaways From Headspace Business Model

Headspace was founded by a Buddhist monk and a former business development director of a large marketing agency.

The firm is cooperating with other influencers (like Kyle Kuzma) for content creation. However, Andy continues to provide narration for most of Headspace’s material.

How Does Bolt Make Money?

The creators of Headspace created an event-based service but soon scaled and distributed their message through a digital app.

The company generates many revenues from its B2C subscription app but has now diversified its revenue streams with B2B solutions and Headspace Health.

The creators of the business claim that it is highly profitable, as evidenced by its most recent round of fundraising more than two years ago.