Although demand for mental health apps Calm and Headspace has been on the decline since 2020, revenue wasn't - quite the opposite.
2022 was a massive year of revenue growth for the pair, growing revenue by 18% and 15%, respectively.
Calm started 2022 with the most revenue the app has ever earned - $13M of net revenue in January. Headspace too, with $8M of net revenue, according to our estimates. Next means what's left after Apple's and Google's fees.
Although revenue dropped throughout the year, the two had their best year of revenue to date, adding $94M and $61M of net revenue.
But 2023 didn't continue all of this amazing growth.
Calm's revenue dropped to $77M and Headspace's to $49M with 2 more weeks to go in December, bringing revenue back to 2021 levels.
And looking at downloads, this trend isn't going to stop any time soon because both apps have seen downloads drop more than 70% since 2020.
An onslaught of new competitors - both indie and well-funded combined with users falling out of love with long-form meditation, has made it hard for both to scale their direct revenue and instead sent them looking for other avenues for monetization.
This is a good example of how important it is to analyze the trends of a market before getting into it. Those who jumped into developing a meditation app because it was hot in 2022, may not be able to continue riding the wave, which clearly ended.
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