Digital Wellness

A new industry proving that digital connectivity and mental health can co-exist.

Overview

In our fast-paced world, many grapple with various mental health challenges, so a proactive approach to maintaining mental well-being is essential. While some mental health issues require professional assistance, integrating wellness practices into daily life can be a powerful preventive measure. For example, meditation, mindfulness, healthy sleep habits, and regular physical activity can significantly reduce the risk of severe mental health challenges.

The rise of technology has transformed how we access wellness resources, making them more readily available than ever before. With the proliferation of smartphones, tablets, smart TVs, and other connected devices, users can easily engage with various digital wellness tools. These services are offered through diverse business models, all aimed at empowering individuals to sustain and proactively enhance their mental health.

Digital wellness apps typically fall into four categories: meditation and psychological wellness, mindfulness and cognitive wellness, sleep therapy, and fitness. By leveraging these resources, individuals can take meaningful steps toward improving their mental well-being and fostering resilience in the face of life's challenges.

Industry Updates

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Market Sizing

The meditation, mindfulness, and sleep apps market in the US could reach USD 2.8 billion–3.5 billion by 2028

Conservative case

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Base case

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Expansion case

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Market Mapping


Meditation and psychological wellness startups dominate the digital wellness disruptors

Although meditation and psychological wellness companies represent the bulk of digital wellness startups, mindfulness and sleep therapy apps have garnered more attention over recent years. Some larger players in the meditation and psychological wellness space, such as Headspace, Calm and Insight Timer, also offer sleep and mindfulness services in an attempt to serve as one-stop solutions for digital wellness. Other startups in the digital wellness industry specialize in a single wellness segment.

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The Disruptors


Calm leads in terms of funding and revenue and Headspace follows closely

The digital wellness space is still in its go-to market stage with the players being privately funded and raising funds occasionally. Calm leads among digital wellness disruptors closely followed by Headspace. Another notable disruptor is Insight timer, who in fact claims to rank first in the US among meditation apps in terms of the time spent by users.

Funding History

Competitive Analysis


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Product Overview
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Incumbents


Traditional wellness and yoga studios digitize their offerings

The Covid-19 pandemic has accelerated a long-term trend of traditional brick and mortar yoga studios and healthcare providers offering their services online.

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Notable Investors


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Market Sizing

The TAM for the meditation, mindfulness, and sleep apps market in the US is estimated at USD 6.8 billion

The total addressable market (TAM) refers to the total revenue opportunity available for a product or service, while the actual market is the market size based on revenue projections.
To arrive at the TAM for the digital wellness market, we looked at the major categories of apps in this space: Meditation, mindfulness, and sleep apps.
Meditation and mindfulness apps account for 87.7% of this TAM, while sleep apps therapy accounts for the remaining 12.3%. The actual market size for digital wellness apps was estimated to be USD 1.6 billion in 2023 and is expected to grow at a CAGR of 13.6% to reach USD 3.1 billion by 2028, with a penetration of 45.6%.

Summary

Our expansion case projects the actual market to grow at a CAGR of 16.1% over the next five years, reaching USD 3.5 billion by 2028, implying a penetration of 50.8%. This is likely supported by faster-than-expected penetration of B2B offerings through employee benefit packages.
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