By Do you know that the meditation app market is anticipated to clock $4,377.95M by 2027 from $188.64M in 2018, at a CAGR of 41.3%? Players like Calm are playing a significant contributing role in the growth of the industry.
People looking for guidance on starting their journey of meditation or enhancing their self-care practice turn to meditation apps like Calm.
Calm is not merely helping people to lead a peaceful life but it’s also an inspiration to entrepreneurs interested in this industry.
So, through this post, we’ll shed a light on the business and revenue model of Calm. Stay with us and know the strategies that have made Calm today’s one of the strongest key players in the meditation app industry.
A Quick Overview to Calm
An award-winning California-based sleep, meditation, and relaxation app Calm was founded by Michael Acton Smith and Alex Tew in 2012.
The app features a wide catalog of calming exercises, music, guided meditations, sleep stories, and more. The key highlight is sleep stories narrated by prominent celebrities like Matthew McConaughey and Stephen Fry – to name a few.
The founders created the app with the mission to make the world happier and healthier by helping users to deal with some of the common mental health issues such as stress, anxiety, and insomnia.
Today, Calm is the #1 application for sleep, meditation, and relaxation with more than 100 million downloads from all over the world. The company even bagged many awards such as Apple’s App of the Year 2017 and Google Play Editor’s Choice 2018.
How Does Calm Work?
Calm is built to work on a freemium business model.
Users can download the Calm app free of cost with access to daily meditations, breathing exercises, mood trackers, certain sleep stories, several music tracks, and some guided meditations in the free version.
There is also a 7-day free trial that unlocks access to some premium content such as 100+ guided meditations, the full-fledged library of sleep stories, exclusive musical tracks, and more.
Once the free trial period is exhausted, the app empowers users to unlock access to the complete library of the app with its paid version.
This is one of the ways Calm has adopted to generate revenue. In the next section, we have covered all the revenue streams of the app, so read on!
Know more: Great Online Marketplace Ideas for Entrepreneurs
How Does Calm Make Money?
As of the first quarter of 2021, Calm clocked in-app purchase revenue of more than $23 million worldwide.
So, let’s look at strategies and revenue models the Calm app has adopted to generate millions of dollars in revenue:
1. B2C Subscription Revenue Model
Calm offers both free and paid versions to its users. With the free version, users get access to limited content.
To provide access to the complete library, the app has a 7-day free trial period.
After seven days, the app recommends users choose one of its premium plans to continue enjoying its complete catalog of sleep stories, meditation programs, and others.
The two subscription plans that Calm offers: an annual subscription at $49.99 per year and the lifetime subscription at $399.99 is a significant sources of revenue for the app.
According to a recent study, Calm amassed more than 4 million paying subscribers.
2. B2B Subscription Revenue Model
Another revenue source for Calm is through two packages it offers exclusively to businesses: Calm for Team and Cam for Business.
Calm for Team is intended for organizations with a squad of 5-100 people. The subscription fee for every user decreases by adding more users.
Another package is Calm for Business intended for organizations with a squad of +100 people.
There is already a good list of companies that use Calm and the list includes reputable names such as Lincoln, Gofundme, Universal music group, and more.
3. Partnership Revenue Model
In the partnership revenue model, Calm forms alliances with other brands in several different ways: content licensing, marketing campaigns, physical product collaborations, product integration, and others.
It has a partnership with reputable brands such as Apple, Uber, and American Express. This generates revenue for Calm.
Know more: Top 10 iOS App Development Company in USA
Calm’s Funding & Acquisition Journey
According to Calm’s CrunchBase profile, Calm has raised $218 million over 9 rounds.
Calm raised Series A funding of $27M with the lead investors being the Insight Partners in 2018.
In 2019, Calm had two Series B funding rounds: $88M and $27M and it gave the company with a valuation of $1 billion in 7 years. Calm became the world’s first mental health unicorn with the Series C funding round of $75M in 2020.
In 2020, Calm acquired health tech company Ripple Health Group that’s known for being the most trusted healthcare solution.
“The Ripple acquisition will allow the combined company to move deeper into the mental health space”, Calm said.
Conclusion
With more people meditating than ever accelerated by the pandemic, there has been increasing demand for mindfulness meditation apps like Calm.
Thus, it makes sense why aspiring entrepreneurs want to capitalize on this opportunity by investing in Calm-clone meditation app development.
If you’re one of them and interested in launching your own meditation app to help people live a stress-free lifestyle, analyzing already existing key players in the industry is the first move.
This post has highlighted the business and revenue model of one of the strong players in the mindfulness meditation app industry.
Another important step is to hire skilled developers to bring your product vision to life.
If you want to work with remote developers who can give their valuable input as soon as the development work is assigned to them, consider hiring from a software development company.
Other benefits you get while hiring developers from a software development company are access to experienced developers, on-demand resource scalability, transparency, various cooperation models, and on-time delivery.
Explore more Business models of other Startups
Comments