Meditation app Headspace bets on voice and AI with Alpine.AI acquisition

Headspace, a meditation app with 31 million users that is valued at $320 million, is doubling down on voice and A.I. technology to help differentiate itself from the rest of the wellness pack. The company today has announced that it has acquired Alpine.AI (previously called VoiceLabs), one of the early players in the digital assistant market, to bring more voice interaction into its main app.

“There are a few meditation apps out there right now…but the ability to react to where you are in your journey with specific advice through voice applications will be [far ahead] of where our competitors are,” says Headspace’s new CTO Paddy Hannon, who will lead the Alpine team of four who are joining Headspace’s offices in San Francisco.

Terms of the deal were not disclosed, but the acquisition includes both the team and the technology, Headspace said. The team joining will include Alpine.AI co-founder and CTO Alexandre Linares and three engineers. Alpine.AI CEO Adam Marchick will retain an advisory role going forward.

VoiceLabs had experimented across a number of voice-based products over the years. They included a voice advertising product that Amazon squashed; an analytics service for voice app developers; and most recently, a solution that could build voice shopping apps by importing retailers’ catalogs and using A.I. to answer customer questions about those products.

The latter, known as Alpine.AI, is what Headspace found most interesting.

Alpine.AI was working on solutions for retailers, which would allow customers to talk to their voice assistants naturally. For example, asking for a mascara, the voice assistant would respond with things like, “What color?” and “Do you want it to be waterproof?”

Headspace is not about to start selling make-up, but it does see potential in applying Alpine.AI’s machine learning technologies to its own domain.

Today, Headspace’s primary interface is audio. Users are guided through meditation sessions by the soothing, calm and distinctive voice of Andy Puddicombe, the co-founder who is a former Tibetan monk.

Building on that foundation, the plan will be to implement Alpine.AI’s technology to give people an interactive voice-based way to discover the different meditation sessions available on Headspace, and to use those interactions to make better suggestions to individual users.

A consumer might tell Headspace they’re “stressed out,” and the app would make an appropriate recommendation based on the customer’s history in the app.

The addition of Alpine’s technology could be a competitive advantage for Headspace, in the crowded and growing field of self-care apps. Headspace is just ahead of chief rival in terms of valuation, with the latter at around $277 million, according to data from PitchBook.

Beyond the initial advantage of improving Headspace’s voice apps, Hannon says Alpine’s technology can be put to use in other ways, as well, including within its iOS and Android apps where users’ actions — not a voice command — could be the trigger that kicks off a personalized suggestion.

Hannon says Alpine.AI was also appealing because of how it was built.

“They built everything on Amazon. They use Docker. This was another reason it was a very attractive acquisition,” Hannon explains. “They built software using the same patterns that we build our software with internally. They’re leveraging much of the same database technologies that we’re using. They use REST services like we do…so from an infrastructure perspective, it was very straightforward.

“I think where it’s going to be interesting is attaching our audio content to their text-based system. But when you look at what Amazon’s providing with things like Lex right now, there’s a lot of text-to-speech or speech-to-text systems, that I think will enable us to do that implementation,” he added.

The deal is also about betting on the future of voice computing. The number of voice-enabled digital assistant devices has grown to over 1 billion worldwide over the past two-and-a-half years. Today, 20 percent of U.S. households have a dedicated smart speaker, and that number is expected to grow.

As one of the leading apps in the profitable self-care app market, Headspace today reaches 31 million users, including over 1 million paying subscribers, across 190 countries. It also runs a B2B business focused on bringing its meditation exercises to larger organizations and their employees, where it has more than 250 businesses on board.

Alpine.AI was a seed-stage company at the time of the acquisition, having raised “a few million” from investors including The Chernin Group, Javelin Venture Partners and Betaworks. But while voice-enabled smart speakers have proven to have some popularity, we’ve yet to see many startups working in voice-based interfaces scale up and take on the likes of Nuance or other large platform players like Apple, Google and Amazon. This might have been part of the reason why Alpine.AI was an attractive acquisition target (and was also open to the exit).

The startup is winding down the small handful of retailers, including Petco, who were using the product and is offering each a one-on-one transition plan.

“We are thrilled to be dedicating our efforts to coaching and guiding users to build healthy routines,” said Alpine.AI CEO Adam Marchick, about the acquisition. “Alpine’s machine learning capabilities accelerate Headspace’s efforts to bring new conversational experiences to market.”