Virtual healthcare provider Sword Health is in talks to acquire digital mental healthcare startup Headspace, in a tie-up that would likely mark the largest deal in the digital healthcare space this year to-date.
Sword Health plans to acquire mental health and medication application Headspace in an all-cash deal, according to two filings with the Massachusetts Health Policy Commission, which requires notice of significant healthcare mergers operating in the state. The proposed merger closing date is 14 September, the filings said.
A purchase price could not immediately be learned. Headspace, which gained widespread recognition through soothing meditations sponsored by celebrities including John Legend, was valued at $3bn in 2021 after a merger with Blackstone-backed Ginger Health. A General Catalyst-led funding round valued Sword Health at $4bn last year, bringing its total funding to nearly $500m per Pitchbook data.
Any deal would reshape the digital health market, a sector that raked in billions of venture capital and growth equity funding when Covid-19 lockdowns pushed millions to abandon physical doctors’ offices in favor of digital care.
As patients have pivoted back to in-person care, some digital healthcare startups have suffered: Headspace has undergone three rounds of layoffs since...
