As investors pour billions into behavioral health startups, Calm has acquired health tech company Ripple Health Group to expand its mental health offerings.
The meditation app announced the acquisition Wednesday along with the creation of Calm Health, which will provide mental health care offerings across the care spectrum, according to the company. The unit will replace Calm’s existing employer service Calm for Business.
David Ko, Ripple Health Group CEO, has joined Calm as its new co-CEO as part of the deal. Current Calm co-CEO and co-founder Alex Tew will become executive chairman, while co-CEO Michael Acton will retain his role.
“As advisor to Calm since 2019, I’ve witnessed firsthand the team’s ability to pioneer the future of mental health, redefining both the category and the distribution channel,” said Ko in a statement. “Calm is on a mission to make the world happier and healthier. I can’t think of a better fit for Ripple’s team and technology. We’re incredibly honored to join the company. I’m excited to work alongside Michael to bring Calm to healthcare.”
Ripple Health Group, which develops tech-enabled solutions for health problems, launched its first two products last month for aging and caregiver burden. Its team will join Calm to create solutions for Calm Health while continuing to build products for caregivers.
The companies did not disclose the financial terms of the deal.
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Calm, which took the global title of the first mental health unicorn in 2019, is banking on a mental health boom that shows no signs of letting up.
Digital health startups with mental health services were last year’s top money raisers, raking in $5.1 billion in 2021, nearly double 2020’s record of $2.7 billion.
As competition in the marketplace heats up, investors, clinicians and patients are demanding data that reflect outcomes just as good or better than those offered by in-person mental health care.
A meta-review published in January in PLOS Digital Health, which considered 145 clinical trials for mental health interventions including nearly 50,000 patients, failed to find evidence supporting any positive health outcomes via mental health apps.
Many startups and their investors have taken the findings as a reminder that while the field is still in its infancy, the companies that stick around will need substantial patient data to back up their methods.
“There is a lot of saturation in the marketplace with companies offering very similar products,” John Torous, M.D., director of the digital psychiatry division at Beth Israel Deaconess Medical Center, told Fierce Healthcare in a December interview. “Eventually, these companies will have to differentiate themselves not based on claims but based on results.”
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Calm already has significant market traction to work with as it looks to expand into adjacent care areas.
To date, the app has been downloaded more than 100 million times, with 100,000 new users across the world coming to the platform each day.