Digital mental health firms Ginger, Headspace to merge in $3 bln deal

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(Reuters) – Meditation Headspace and video therapy service provider Ginger said Wednesday they will combine in a deal that values ​​the joint company at $3 billion, as the COVID-19 pandemic encourages the use of virtual platforms for mental health care.

Founded in 2010, Headspace offers mobile-accessible sessions, videos, and articles on meditation and mindfulness and has nearly 70 million users globally.

The app has become incredibly popular in the past year and with the pandemic taking its toll on people’s mental health, the interest in venture capital in such companies has increased.

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Ginger, which raised $100 million in March, provides members with access to unlimited self-directed care, 24/7 on-demand and scheduled training as well as video therapy and psychiatric support.

Ginger, also founded in 2010, saw a more than fourfold rise in the number of people using its training services and a more than fivefold jump in treatment users in mid-July compared to levels seen before the pandemic.

Ginger and Headspace together serve the employees of 2,700 companies.

Russell Glass, CEO of Ginger, said in an interview with Reuters.

“We needed to make sure people were getting care and very early in their journey.”

The two companies said Russell Glass is set to lead the combined company, which will be called Headspace Health, when the merger is expected to close in the fourth quarter of the year.

CeCe Morken, CEO of Headspace, said the merger with Ginger will enable Headspace to build healthy routines for people that last a lifetime.

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(Reporting by Amruta Khandekar) Editing by Amy Karen Daniel

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