A historically tight labor market has increased the importance of a robust and innovative suite of employee benefits, and the pandemic’s enlightenment regarding wellbeing has elevated wellness-related benefits to the high-priority realm. Guardian’s Workplace Benefits Study emphasized the importance of normalizing mental, physical and financial health needs. Be it mental & physical health, workplace safety or financial wellness, employers are seeking new ways to retain and attract talent via wellbeing solutions.
Physical Wellbeing
Employers offer physical health and safety solutions to promote a healthy and productive workforce and reduce health insurance costs. Movespring, an employee wellness platform that promotes physical activity, was acquired by Reward Gateway to bolster its employee engagement solutions. Providers targeting industries with increased regulation for employee health and safety are receiving interest from institutional investors. For example, US Mobile Health Exams, a provider of mobile employee health testing for OSHA regulated companies, was acquired by Potomac Equity Partners.
Mental Wellbeing
The pandemic spurred awareness and investment surrounding mental health as well as physical wellbeing of employees, making mental health solutions one of the top employer priorities in 2021. The interest continues in 2022. According to the Guardian study, employers who have increased their investment in mental health benefits achieved a 50% increase in retention. Workplace mental health platform Lyra raised a $235M late-stage round, led by Dragoneer Investment Group. On the M&A side, mental health and wellbeing provider, LifeSpeak acquired Wellbeats for $93M, marking the company’s fourth acquisition in 9 months.
Financial Wellbeing
The overall employee wellness landscape has seen a lot of investment within the past year, but recently there has been a surge of venture investment into financial wellness solutions. Several platforms for financial wellness have raised significant rounds in 2022, most of which are addressing financial literacy, financial coaching and earned wage access for employees. As highlighted in our quarterly round up, Refyne, provider of earned wage access for salaried and contract workers, raised an $82M series B round led by Tiger Global. Walmart-backed Hazel acquired two fintech platforms: Even and ONE. The former is a financial benefits platform that provides employees access to earned wages, budgeting and saving, while the latter is a direct-to-consumer platform that combines saving, spending and borrowing into one digital account. Moreover, earlier companies continue to enter the space and receive funding, such as provider of earned wage access and financial education Wagely, who raised an $8M seed round led by East Ventures.
The interest in employee wellness has led to an increased emphasis on comprehensive and streamlined benefits management for employees. Several illustrative deals took place during the quarter, the most significant being TriNet Group’s acquisition of Zenefits, an HR solution that encompasses payroll, benefits, compliance and performance management. In addition, Vera Whole Health acquired benefits provider Castlight Health for $370M. And Betterfly, a holistic wellbeing, health insurance and social impact platform, raised $125M series C, led by Glade Brook Capital Partners at an $875M valuation. We expect robust investment in the wellness and benefits segment to continue in the near term and the range of solutions to broaden as the definitions of wellness, benefits and social impact expand.
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DISCLAIMER This presentation is intended for information and discussion purposes only and does not constitute legal or professional investment advice. Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of Harbor View Advisors, LLC (“HVA”). The information in this presentation was compiled from sources believed to be reliable for informational purposes only. HVA does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented.
