"A lot of us know someone who has struggled with these types of challenges and getting access to care is just not as easy as folks would like it to be," Evans said.
Headspace has completed more than two million virtual coaching sessions over nine years through its enterprise business, dating back to before its August 2021 merger with Ginger, which gives it an advantage over other direct-to-consumer companies, Evans said.
"We are working with folks who know and love our work already,” Evans said. “We already have that demand.”
Headspace has primarily provided mental healthcare to individuals through contracts with customers such as employers and health insurers. The rollout of a direct-to-consumer product is happening amid larger changes at the company. Russell Glass, who has served as CEO of the company since 2021, said in March he would step down later this year so someone else could lead the next phase of growth.
The company has faced its fair share of challenges in dealing with the wider economic landscape that has been unfriendly to others in digital health. In June 2023, Headspace laid off laid off 181 employees, or 15% of its staff. It was the company’s second round of layoffs in six months, after cutting 50 employees in December 2022. Headspace closed a $105 million senior debt facility in June.
A spokesperson for Headspace said the company was not profitable.
Selling services directly to consumers is not without risk. After interest spiked in the early months of the COVID-19 pandemic, it trended downward in 2022 because of the rising cost of customer acquisition and lower use of telemedicine. Some digital health companies, such as Teladoc Health and Talkspace, have shifted away from the direct-to-consumer market and emphasized the business-to-business side because they say it has better margins.
“Most companies…will go from direct-to-consumer before moving into [business-to-business],” Evans said. “We’re flipping the script on that and taking what's been proven and battle-tested with our employers and health plans into the direct-to-consumer space. And this really is a product of our mission and our desire to be able to reach as many people as possible.”
Evans said the company will start with virtual coaching, priced at $99.99 per month for three text-based, 30-minute sessions, before moving into therapy for consumers later this year. Employer and health plan customers get unlimited text-based coaching as well as mindfulness and mediation content and access to in-person and video-based therapy, but not all of those services are subsidized.
