Headspace and Ginger, two app-based digital mental health firms that work with employers and health plans, will merge into a combined company called Headspace Health, they announced Wednesday.
Headspace, based in Santa Monica, California, sells a meditation and mindfulness app, while San Francisco-based Ginger offers access to on-demand mental healthcare, including behavioral health coaching via text message and video-based telehealth visits with therapists and psychiatrists. Financial details of the merger were not disclosed. The deal is expected to close in the fourth quarter.
Headspace has raised $215.9 million since it was founded in 2010. Ginger, founded the same year, has raised $220.7 million.
As a combined company, Headspace Health will be valued at $3 billion, according to the companies.
Headspace Health will cover nearly 100 million lives through more than 2,700 employers and health plans and its direct-to-consumer customers.
"Through this merger, we can uniquely tackle the full spectrum of mental health needs—from prevention to clinical care—all from one integrated platform," Ginger CEO Russell Glass, who will serve as Headspace Health's CEO after the merger closes, said in a news release.
Headspace CEO CeCe Morken will maintain her role as CEO of the Headspace division and will also serve as president of the combined company.
While teletherapy apps have traditionally been a cash-pay industry, employers, insurers and even government agencies are now striking contracts with companies that claim their products can help reduce burnout, stress, anxiety and depression symptoms as a way to meet heightened consumer demand and improve employee retention.
These digital mental health companies are part of the growing telehealth and mobile health app subsectors within the digital health space, which raised $4.3 billion and $1.4 billion, respectively, in 2020, according to data compiled by Mercom Capital Group. Digital health companies as a whole raised $14.8 billion last year, up 66% from 2019.
Other digital mental health companies include Calm, a meditation app provider that's raised $218 million to date, and Talkspace, a digital therapy company that went public through a merger with a special-purpose acquisition company in June.