Selena Gomez and her mom Mandy Teefey discussed Wondermind during a panel at the South by Southwest Conference in March 2024, in Austin, Texas.
2024 Invision
Wondermind, the mental health startup cofounded by singer and entrepreneur Selena Gomez, laid off nine people, or 60% of its 15-person staff on Monday afternoon, according to a source with knowledge of the situation.
This comes two days after Forbes broke the news about financial problems at the four-year-old startup, which was founded by Gomez, her mom Mandy Teefey and newsletter entrepreneur Daniella Pierson, who left in 2023. The company, which focuses on promoting mental “fitness” through articles, podcasts and interviews, was inspired by the founders’ respective mental health struggles; Gomez revealed she was diagnosed with bipolar disorder in 2020.
A number of Wondermind employees had told Forbes that the company failed to pay them in recent weeks, and also owed tens of thousands of dollars to freelancers and vendors. In one recording of an all-hands meeting obtained by Forbes, Teefey, who is Wondermind’s CEO, told employees that she’d taken out a loan against her home to keep the company afloat.
A Wondermind spokesperson told Forbes on Saturday that the company had “rectified” the situation and would pay back all outstanding debts on Monday. “In the coming days we will be transitioning into a new chapter for Wondermind,” the spokesperson said.
Then on Monday, all but four of Wondermind’s employees were called into one-on-one meetings in which they were told they were laid off, according to the one source who spoke on the condition of anonymity.
This person says that they employees were told they would be paid through Monday, May 12 and then would receive two weeks of severance. Employees also received a missing paycheck from April 30 on Monday, May 12, but are awaiting repayment on health insurance premiums the company had previously paid, but that employees had to front in the last month.
A spokesperson for Wondermind said the company has “no comment” on the layoffs and pointed Forbes to the statement it sent over on Saturday, which said Wondermind was experiencing “growing pains” “like many startups.” The spokesperson said that the layoffs had “nothing to do with” multiple employees speaking to Forbes previously about the company’s financial struggles.
Teefey’s chief of staff told Forbes, also on Saturday, that her boss “has been singularly focused on keeping everyone’s livelihoods intact and keeping the company growing.”
A representative for Gomez did not immediately respond to a request for comment from Forbes.
Wondermind’s cash crunch first surfaced on March 31 when employees didn’t receive a paycheck for the first time. Later that same day, Teefey sent an email to the staff with the subject line “Important Update,” informing them that their healthcare provider Sequoia (not to be confused with the venture capital firm) had terminated employees’ benefits including health, dental and vision insurance two weeks prior on March 15, according to a copy of the email reviewed by Forbes. Teefey blamed a delay in investor money and claimed the company was on the verge of closing its Series B round but that never seemed to happen.
The company had raised $5 million from a group of high profile outside investors that reportedly included Serena Williams’ VC firm, Lightspeed Ventures and the family office of real estate billionaire Barry Sternlicht in 2022, in a funding round that apparently valued Wondermind at $100 million. A representative for Sequoia Capital, which Pitchbook reports to have also invested in Wondermind, says the VC firm is not an investor. Forbes reached out Wondermind’s other VC investors on Friday for comment but as of Monday evening had not heard back from any of the firms.
According to one former employee, Wondermind had been trying to raise a Series B round of financing since 2023 but had not been able to secure any new funding. This person, who spoke on the condition of anonymity, said that as of mid-2023, Teefey told them that she and Gomez had put $8 million of their own money into the company.
After missing yet another payment to employees on April 30, Teefey announced at an all-hands meeting on May 8 that she’d taken out a loan against her home to pay back the company’s debts. Two Wondermind employees told Forbes that the company owed a lot of money to vendors, including $60,000 to a PR firm the company had worked with.
Selena Gomez, who Forbes estimates is worth $700 million thanks primarily to her stake in her cosmetics startup Rare Beauty, is listed on Wondermind’s website as its “Chief Innovation Officer” but according to a current employee is not engaged with running the day-to-day business, as Forbes previously reported. “We have to fight with her agent to get her to do anything for us, and she rarely does,” this person said, noting that Gomez met with the staff only once in three years. A Wondermind spokesperson insists this is “absolutely not true.”
What is true is that the 32-year-old actress has been juggling a busy schedule. She has appeared in 40 episodes of “Only Murders In The Building” between 2021 and 2024; she starred in the movie “Emilia Pérez,” for which she was nominated for a Golden Globe as best supporting actress this year; and she recently got engaged to Benny Blanco, with whom she just produced her seventh album.