Founded in 2013, BetterUp is a mobile platform for personal growth and professional development with the mission to empower individuals with the necessary tools and resources to help them achieve professional success.
But how does BetterUp makes money? Are you curious to learn about their business model? If so, this is exactly what this article is all about. Here, you’ll take a closer look at their business model and learn about the different ways BetterUp generates revenue.
BetterUp is a fast-growing company that makes money through membership fees to access its multi-faceted corporate training and education platform. This helps companies drive new levels of engagement and performance from their employees.
BetterUp is a platform that provides executive coaching to employees as a way to help employers empower their workforce.
It is designed to enable employees access to the training, resources, and practice they need to reach their full potential and grow into better leaders at work, at home, and even in the community. The platform connects employees with licensed therapists and career coaches for focused guidance, support, and therapy sessions.
The company helps businesses invest in their employees, boasting a 130 percent increase in job performance when using their platform. In doing this, BetterUp has made a typically exclusive coaching experience available to employees at all levels.
BetterUp makes money by charging a fee to customers who use their coaching services. For a monthly fee, businesses can empower employees, increase productivity and decrease burnout in the workplace by utilizing their platform.
In offering their professional and research-driven coaching services, the company has generated revenue from over 100,000 customers.
Business Model of BetterUp
BetterUp applies six core values to its business model: courage, craftsmanship, empathy, zest, playfulness, and grit.
These values help to remind the company of its purpose, as well as keep them accountable. Aligning themselves with these core values has undoubtedly credited them a great source of success with the platform.
CEO and co-founder Alexi Robichaux recognized that the overall wellbeing of a business’ employees is vital to its success. Individuals around the world spend a huge chunk of their lives in the workplace. Robichaux found that encouraging health and wellness in the workplace not only benefits employees but the employer as well.
Recognizing a host of mental health issues such as anxiety and depression becoming more prominent, BetterUp examined the source. The company conducted a study that takes a closer look at the rise of loneliness in the workplace. What they discovered became the driving force for what the company believes in today.
While employers spend exorbitant amounts of money on tools and resources to increase productivity, employees’ stress and anxiety are also increasing. This discovery points to a significant shift in how we work across the globe today.
The company found that those employees working in lower positions typically found less fulfillment in work than their higher-ups. With their bottom-up approach, BetterUp provides care to employees at all levels, a benefit typically reserved for executives.
BetterUp provides professional coaching and valuable tools and resources on its platform to employees at all levels. Their virtual one-on-one coaching is accessible through video or text messaging, making the feature widely available to all.
Users are asked to take a quick questionnaire in which their answers are used to match them with a coach. Using advanced technology, like artificial intelligence and scientific and behavioral research, BetterUp changed the way we approach coaching.
BetterUp challenges employees to ask themselves what their purpose is at work. The company argues that work should be a platform where growth occurs. They believe that the workplace is not meant to simply provide a paycheck, but rather provide personal development as well.
With this in mind, the company formed its mission to help drive growth both personally and professionally. Using AI technology, behavioral science, and human interaction, BetterUp delivers a program, crediting them as the world’s largest coaching network.
BetterUp provides valuable resources on its platform for customers to access.
They provide information that teaches employers how to enhance their employee’s work experience. With topics covering leadership and management, diversity and inclusion, coaching, culture, and more, BetterUp blogs make management more insightful.
They also offer case studies to highlight the data behind employee engagement, personal development, high-performance cultures, and so on.
Additionally, users have access to a number of other resources such as helpful guides, informative events, and more. Customers who take advantage of these resources in conjunction with their coaching program can expect to better meet their goals.
The company believes in overall wellness, not limited to the workplace, underlining the adage that “innovation starts with empathy”. They launched BetterUp Labs, a comprehensive approach to holistic restoration and maintenance, allocating $20 million in funding towards its behavioral research.
BetterUp Labs conducts behavioral research that will assist in understanding that work and life oftentimes are not actually balanced. It recognizes that work-life balance is more than just finding time to catch up with friends on the weekend. Instead, the Lab uses its findings to impact change in personal development that translates to career development.
In asking themselves how to improve the overall human condition, the company vowed to make coaching better. Instead of simply making it more accessible and affordable, BetterUp strived to make coaching more impactful.
Their business model has found great success as their customer base has grown by 80 percent in just this past year. With prominent companies such as Google, Lyft, Hilton, and more taking advantage of their platform, BetterUp is showing great progress.
They have no plans of slowing, announcing the upcoming launch of BetterUp Care, a wellness program focusing on mental health.
How Does BetterUp Make Money?
Platfrom Subscription Fees
BetterUp makes money from virtual coaching sessions offered to employers and individuals for a monthly fee. They also make money from users utilizing certain tools and resources that they provide on their platform. Using artificial intelligence, BetterUp provides an executive coaching experience to employers at a fraction of the cost.
The coaching industry is quickly growing at a rapid rate of 12 to 15 percent annually, according to a study by The International Coaching Federation. There is plenty of money to be made in this sector that generated a total of $2.9 billion in revenue in the year 2019 alone. And with BetterUp leading the pack as the world’s largest coaching network, they are undoubtedly earning much of that income.
Early this year, the platform announced a monthly fee of $499 for employers. However early buyers could expect to pay a fee of $249 per month. Potential customers can request a demonstration to be connected with a representative who can help them set up their plan.
The company promises employers that by investing in their coaching services, they could quickly see real results. Studies show that high levels of stress quickly lead to burnout, which inevitably leads to a decrease in production.
Employers who invest in BetterUp record a 24 percent decrease in stress, and a 19 percent decrease in burnout among employees.
This is a huge draw for businesses wanting to further drive their bottom line. It is also the reason why BetterUp tripled its revenue growth in 2018 for the second consecutive year. 70 percent of customers describe their coaching experience with BetterUp as “amazing” and “life-changing”.
BetterUp has drawn support from a number of prominent individuals and companies. Early this year, the UK’s Prince Harry joined the team at BetterUp as Chief Impact Officer. He praised the company, calling their platform “invaluable”.
Additionally, their one-on-one coaching services have received praise from many Fortune 1000 companies. To date, the company has made customers out of 28 Fortune 1000 companies such as Instacart and Airbnb.
Equinix, a digital infrastructure company shares its own success story from using the BetterUp platform. The company recorded a 24 percent decrease in employees experiencing stress and a 15 percent decrease in burnout rate. These figures are even higher than the company average.
Their approach to wellness does not stop at reducing the negative, but increasing positive as well. Employers at Equinix reported seeing a 25 percent increase in focus and a 14 percent increase in resilience among workers. The company hires top experts to translate and apply historical data to modern business goals.
BetterUp Funding, Valuation, and Revenue
Since their first funding round in 2016, BetterUp has gradually raised quite a bit of capital. They saw tremendous growth in 2019 with their series C funding round earning $103 million led by Lightspeed Venture Partners. This is nearly four times more capital than what was raised in their previous series B round of $26 million.
In just one year, BetterUp generated more than two times their annual recurring revenue. They also saw a net revenue retention rate of over 140 percent. In addition to this, the company has recorded annual revenue of approximately $229 million, according to GrowJo.com.
In February of this year, BetterUp raised $125 million in funding in their series D round led by ICONIQ Growth. With their newly acquired valuation of $1.73 billion, the company was able to achieve “unicorn status”. This is a coveted title defined as a privately owned start-up earning $1 billion in company valuation.
Thanks to investors, the company has earned a total of approximately $267.8 million in capital since 2016. Using this funding, the company plans to aid in the launch of its newest program, BetterUp Care.
BetterUp Care will provide a more comprehensive wellness program for employees that focuses on true healing from the inside out.
Is BetterUp Profitable?
BetterUp, the leading provider of leadership development and training solutions, has a profitable business model and anticipates continued strong growth in sales and profitability.
By integrating video content in a personalized training experience, BetterUp has developed a profitable business that is poised to displace traditional corporate training companies.
BetterUp has earned a reputation for its commitment to making health and wellness accessible to all employees. Their holistic business model has placed a greater responsibility for employers to invest in the employees who drive their business.
Even as the world’s largest coaching network, the company is expanding, and continues to do so.
Conclusion: How Does BetterUp Make Money?
To sum up, BetterUp is a mobile-based leadership development platform used by hundreds of enterprises to improve the performance of employees in their workplace. It is trusted by many big companies such as ABInBev, Google, Salesforce, and more.
While leadership development may appear to be a luxury for companies with slim profit margins, the truth is that spending time and money on leadership development will yield great results.
Just like other types of investments, leadership development should be measured in terms of ROI (return on investment). BetterUp plans to help businesses achieve their goals by offering them a platform that promotes effective and engaging leadership training.
Thanks for taking the time to read through this article. We hope you enjoyed the content above. If you did, please share it with your friends and colleagues on social media.
If you have any questions, feel free to write us an email. Our team will respond to you as soon as possible.
Have a nice day!