PROVIDENCE – ShapeUp, a provider of corporate well-being solutions, has been acquired by Virgin Pulse, part of Sir Richard Branson’s Virgin Group.
Acquisition terms were not disclosed, but the deal also includes Global Corporate Challenge, based in Melbourne, Australia.
All three companies have the same focus on employee well-being, according to ShapeUp founder and CEO Dr. Rajiv Kumar, who will become president and chief medical officer of the Virgin Pulse Institute, where he will lead the organization’s analytics team.
Kumar, in a telephone interview, said the partnership has been in the works for several months.
“It’s the right move for ShapeUp because it allows us to continue to pursue our mission to make workplaces healthier and more successful. It gives us a larger footprint, a bigger brand, greater financial resources,” Kumar said.
He said the company will be known as Virgin Pulse. ShapeUp’s offices in Providence and Boston will remain, where 92 and nine are employed, respectively. The company also has an additional 33 remote employees throughout the country.
However, seven employees will be eliminated due to redundancy – six in Providence, and one remote worker, he said.
The benefit to joining forces with Framingham, Mass.-based Virgin Pulse and Global Corporate Challenge, Kumar said, is that it broadens the global reach of their well-being platforms. ShapeUp has 821 customers, all of which are based in the United States, while Virgin Pulse has 220 customers in the U.S. and Global Corporate has 1,195 customers mostly outside the U.S. across 185 countries.
“It’s a massive global opportunity. … We all have the same mission, to promote the well-being of employees at work. Over the next two years, we’ll be bringing products together in a single platform, taking the best elements from each,” Kumar said.
ShapeUp has been around a decade, and Kumar said the company has seen growth every year as businesses are realizing employees are their greatest asset.
“[Businesses] want to be the best place to work. … They want to be the type of employer to retain top talent,” said Kumar, adding the employee wellness market totals $1 billion in the U.S. alone.
Employees benefit from programs that improve work-life balance, and help them meet personal goals such as eating healthier, losing weight and reducing stress. Programs also help boost loyalty to employers, he said.
Kumar described the partnership as a “huge win” for ShapeUp, and the state of Rhode Island. He said more jobs will be created as a result of the partnership.
“I think of ShapeUp as a true Rhode Island startup success story. We’re thrilled if the ShapeUp story becomes a model that can be replicated that others can follow to create jobs in high-growth industries like technology,” Kumar said.
Virgin Pulse said that joining with ShapeUp and Global Corporate Challenge will make it the largest, most comprehensive, technology-enabled well-being software provider worldwide.
Together, they will have approximately 6,500 customers; annual revenue is expected to exceed $100 million this year.
Virgin Pulse investors Insight Venture Partners and Virgin Group, ShapeUp investors Cue Ball and Excel Venture Management, and GCC investors will continue to support Virgin Pulse through this next phase of growth by investing capital into the combined entity, a news release from Virgin Pulse stated.
“We couldn’t be more excited to welcome ShapeUp and GCC into the Virgin Pulse family,” Virgin Pulse CEO Chris Boyce said in a statement. “In addition to bringing together the experience, strengths and momentum of three proven industry leaders, joining our organizations allows us to present an exciting and compelling opportunity to our collective customers and the firepower to aggressively expand into new geographies and markets.”
Said Tom Sermon, CEO of GCC, now president of Virgin Pulse International, “Virgin Pulse, ShapeUp and GCC each believe that engaging employees directly in improving their health can strengthen corporate cultures, build employment brands and help organizations develop high-performing organizations that drive meaningful and measurable business outcomes. Together, we can elevate that mission and amplify the message.”