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Business Operations Business Models

How Does Calm Make Money (Business and Revenue Model)

The Calm business model

Calm logo
Here’s what you should know:
  • What is Calm, and how does Calm work?
  • How does Calm make money?
  • Subscription Revenue (Calm Premium)
  • Calm Business (B2B)
  • Calm subsidiaries, acquisitions, and exits
  • Calm profit and revenue
  • What is the Calm business and revenue model?
  • Calm funding, net worth, and valuation

How does Calm make money and how is it free to use? Well, here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Calm business and revenue model, how much Calm makes per year, and how Calm works.

What is Calm, and how does Calm work?

Calm is a software company that focuses on offering meditation products like guided meditations and Sleep Stories to improve sleep for its users.

Founded in 2012 by Michael Acton Smith and Alex Tew, Calm has amassed more than 100 million app downloads since its founding back in 2012. Making it one of the more downloaded sleep and meditation apps ever.

So, how does Calm work? To use Calm, users can download their mobile app from the Apple App Store or Google Play store.

Once downloaded, users can simply browse the app for things like guided meditations that last between 3 to 30 minutes, featured bedtime stories to improve and help with sleep, and more. With the option of upgrading to a paid plan for additional features.

Some of Calm’s competitors include Headspace, and other sleep / mediation apps.

Calm App in Apple App Store | Calm Business Model | How Does Calm Make Money? | How Does Calm Work?
Source: Apple App Store | Calm

How does Calm make money?

According to reports, the Calm app has been downloaded more than 100 million times.

So how does Calm make money off of all these users and app downloads?

Below is a breakdown of how much money Calm makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Calm makes money in 2022

Calm has a revenue model that makes money in two (2) ways; subscription revenue and B2B revenue.

#1. Subscription Revenue (Calm Premium)

Though Calm is free to use, Calm makes most of its money by upselling its users to its paid subscription plan.

For a subscription fee of $69.99 USD per year, premium members unlock access to additional content such as 100+ guided meditations for anxiety and stress, an entire library of Sleep Stories, Calm’s Masterclass taught by world-renowned experts, and more.

How much does Calm cost?

  • $69.99 USD per year

Note: Of Calm’s more than 100 million app downloads, it’s unclear how many of those users upgraded to Calm Premium.

#2. Calm Business (B2B)

Calm also makes money on the B2B (business to business) side of things with Calm Business.

The way it works is Calm partners with more than 1,500 organizations so they can offer Calm’s services to their employees as an employee benefit (a perk of working for them). Some of the organizations include companies such as GoFundMe, Universal Music Group, Accenture, and more.

How much does Calm cost? | Calm Business Model | How Does Calm Make Money? | How Does Calm Work?
Source: Calm

Note: Companies partner with Calm so they can offer Calm’s services to their employees as an employee benefit.

Calm subsidiaries, acquisitions, and exits

To date, Calm has made a total of 1 acquisition, 1 investment, 1 lead investment, and 1 successful exit.

Mergers and acquisitions business model
Source: Crunchbase | Calm

Calm profit and revenue

Calm’s last reported earnings came in 2019 when they brought in $150 million in revenue. Since then, Calm has not released any official reports in regards to company earnings.

Note: Because Calm is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Calm business and revenue model?

Calm makes money through a few revenue models that they combine within their company, they are:

  • Freemium business model
  • Subscription business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

Calm funding, net worth, and valuation

According to Calm’s Crunchbase profile, Calm has raised $218 million over 9 rounds and has a post-money valuation of $1 billion to $10 billion as of December 8, 2020.