Sword Health is set to acquire Headspace as the digital health company expands further into behavioural health, according to public documents. The transaction is due to take effect on September 14, although details of the deal remain limited and neither company had responded to requests for comment. The purchase price has not been disclosed. Public documents state that clinical services will not be reduced following the merger, while some corporate positions could be affected where the two organisations have overlapping functions.
New York-based Sword Health began in musculoskeletal care before expanding into women’s health, cardiometabolic care and mental health. The company works with employers, health plans, labour unions and health systems through an AI-powered platform, while San Francisco-based Headspace provides therapy, coaching, wellness apps and employee assistance programme services to employers and health plans, as well as offering direct-to-consumer services. Headspace employs about 598 people, including 418 full-time staff. “The combined company anticipates that there may be reductions in corporate staff where functions are duplicative between the two organisations,” the documents state. The documents also say the transaction will involve a cash payment subject to customary post-signing adjustments, including adjustments for closing cash, indebtedness, transaction expenses, and net working capital.
Sword Health has previously identified mental health as part of its wider growth plans ahead of a possible IPO in 2028. Its existing Mind service combines an AI therapist, a wearable designed to detect depression and anxiety and 24-hour input from clinicians. The company has also indicated that partnerships and acquisitions could contribute to its expansion into serious mental illness services. Virgilio Bento, chief executive of Sword Health, previously said: “I want to IPO when we have the mental health solution itself right because I want to be focused right now on really making sure that we build a valuable mental health solution. “I don’t want to be distracted by going public. “We are quite focused on mental health and that’s why an IPO is not our goal in the short term.” Sword Health was founded in 2015, while Headspace in its current form was created through the merger of the Headspace meditation app and digital clinical provider Ginger Health in October 2021. The combined Headspace business was valued at US$3bn at that time. Sword Health raised US$40m at a valuation of about US$4bn a little over a year ago, when it also launched its existing mental health offering.