Virgin Pulse, a company focused on improving the lives of employees, has merged with two of its competitors —ShapeUp and Global Corporate Challenge Unite — in a move to dominate the corporate wellness market. Financial terms of the deal were not disclosed, and the company said it laid off less than 3 percent of its total workforce.
Part of the Virgin Group, Virgin Pulse specializes in designing technology to promote good lifestyle habits for employees. Its products are billed as being tailored to individuals, helping them manage nutrition, sleep, stress, focus, cognition, financial health, personal relationships, philanthropy, and more.
Virgin Pulse CEO Chris Boyce told VentureBeat that the company’s goal is to “transform the corporate wellness market by showing companies that investing in employee health and well-being is moving the needle in meaningful and measurable ways across the entire business.” He continued, saying, “Wellness programs have typically been seen as wellness done to employees, not for them. The intent has been focused on reducing healthcare costs, disease management, and on curing the already sick. We believe the focus should be on helping organizations build well-being into the DNA of their corporate cultures and engage all employees.”
ShapeUp and Global Corporate Challenge Unite specialize in similar areas of employee well-being. The former has raised $13 million in venture funding, while the latter hasn’t disclosed its investments.
In discussing Virgin Pulse’ acquisition of these two firms, Boyce laid out four main reasons behind the move. The first is a philosophy that engaging with employees about their health and well-being results in a stronger corporate culture and higher performance. The second is to do with leadership, as all three companies have CEOs with extensive years of experience, tools, resources, and a proven practice. Boyce summarized this as: “A strong cultural fit, shared mission, and mutual respect for leadership of each organization and the ability to build a successful business.”
Product synergy and global reach were the other two main reasons for the merger. Since all three have been competitors, they have developed unique product capabilities and strengths that complement each other. And as a bigger company, the new Virgin Pulse can scale its offering to deliver services to companies of all sizes around the world.
Following the merger, Boyce will remain CEO, ShapeUp founder and CEO Rajiv Kumar will become president and chief medical officer, Global Corporate Challenge CEO Tom Sermon will be president of international operations, and Global Corporate Challenge founder and president Glenn Riseley will become the director of new market development.
Virgin Pulse said that its existing investors, Insight Venture Partners and Virgin Group, along with ShapeUp’s backers Cue Ball and Excel Venture Management and Global Corporate Challenge’s shareholders have together invested “significant capital” in the combined entity to accelerate the next growth phase.