Calm, the meditation app valued at $250m, is pursuing acquisitions and considering entering retail as part of its quest to become “the Nike of the mind”.
The San Francisco-based start-up wants to become a flagship brand for mindfulness, inspired by the sportswear maker and the Virgin conglomerate.
The Calm app includes guided daily 10-minute meditations, half-hour stories to help you sleep, and masterclasses in subjects including mindful eating. More than 30m people have downloaded the app, which costs $59.99 for a year’s subscription.
After raising $27m this summer in a round led by Insight Venture Partners, Calm wants to explore making more physical products. It already sells a scented sleep spray but wants to go much further.
Michael Acton Smith, one of the two British co-founders of the company, was behind the popular children’s brand Moshi Monsters, which started as a children’s website and expanded into toys, music and a magazine. He said it was important to take the Calm brand offline.
“I can see retail outlets, to clothing, to publishing, to hotels. Ultimately, we’d like to buy an island and have a Calm island run as a profitable resort,” he said.
In the Calm offices in San Francisco, where every day starts with a communal 10-minute meditation from the app, hangs a framed cover from a 1977 edition of People magazine: it features a picture of Farrah Fawcett running, and the words “stars join the jogging craze”.
Calm believes it is at the start of a trend in which more people will take active care of their mental health, just as physical exercise became popular decades ago.
Alex Tew, the other Calm co-founder, said the market could be huge. “Most people understand the benefits of physical movement and good food. They are now beginning to see sleep and meditation as the missing pillars in modern society,” he said.
Calm is unusual for an app in being able to charge for its core service, rather than funding it through digital advertising. Unlike other subscription businesses, such Netflix and Spotify, it has not had to pay huge sums for its content. Run by a 30-person team, the six-year-old start-up has been cash flow positive for several years, according to its co-founders.
“Often in Silicon Valley, there’s a trade-off between growth and profitability. It is very rare to be able to do both at the same time,” said Mr Acton Smith. “Calm is one of those businesses that does.”
Calm faces competition from other meditation apps, most notably Headspace, which has raised $75m at an undisclosed valuation. Both apps were founded by British men who moved to California. Mr Acton Smith said Calm had deliberately avoided iconography of flowing orange robes and New Age mysticism, which he calls “woo woo”.
“We’ve both done well at understanding the brand and taking the crunchiness and health and wellness from California and not leaning into it; instead making it more western, more mainstream — and in a way, more British and cynical,” said Mr Acton Smith.