Wondermind, a startup focused on mental health co -founded by the singer, actress and businesswoman Selena Gomez, is going through a crisis after apparently running out of cash and stop paying their employees, suppliers and freelancers since the end of March.
For now, the company based in Los Angeles, which has about 15 employees publishing articles, interviews and podcast on mental health issues, remains in operation thanks to Gomez’s mother and executive director of Wondermind, Mandy Teefey. She told Employees on Thursday that she mortgaged her house to settle the outstanding debts. Employees have received the payment of one of the late fortnights, but they still expect the other, while freelancers and suppliers have accounts receivable for tens of thousands (if not hundreds of thousands) of dollars.
A Wondermind spokesman said that the company has already “resolved” the situation and that all pending payments will be held on Monday. “Like many startups, Wondermind has been going through its own growth challenges,” said the spokesman in a written statement to Forbesand added that “in the next few days we will enter a new chapter for Wondermind, and we will continue with our important mental health work that benefits hundreds of thousands of people.” Teefey declined to comment for this article and a Gomez representative did not respond to the request for comments from Forbes.
Gomez, 32, is one of the most rich self-made businesswomen in the United States, with an estimated fortune of US $ 700 million. Its wealth is mostly linked to its Rare Beauty makeup line, which it launched in 2020 and generated revenues for about US $ 370 million in 2023. In 2021, Wondermind launched along with their mother and Daniella Pierson, founder and CEO of the female bulletin The Newsette. Inspired by the personal health struggles of the founders, Pierson previously described the site A Forbes as “a sexier and more entertaining competition” against sites such as Psychology Today and Webmd.
“Honestly arose from a conversation that we had between us about our processes, and we ended up connecting a lot. It was a turning point,” Gomez said during a panel he offered with Teefey last March at the SXSW conference in Austin. That led them to ask: “How can we do that for other people?”
In 2022, a year after its launch, Wondermind raised US $ 5 million in a series A series with an assessment of US $ 100 million. The investment was led by Serena Ventures, by Serena Williams, with the participation of Capital Sequoia, Lightspeed Ventures and the family multimillionaire office Barry Sternlicht.
Despite the initial expectation (and its co -founding celebrity with great resources), Wondermind seems to be in a critical financial situation, according to recordings, emails obtained by Forbes and interviews with three current employees who spoke on condition of anonymity for fear of reprisals. In addition to the debts with the team, two of these employees claim that the company owes US $ 60,000 to a public relations firm with which it worked previously. One of them ensures that tens of thousands of dollars are owed to Freelance writers, some of which have not been paid in more than three months.
Two current employees point out that the problems began in January 2023, when Teefey assumed as the only CEO. Pierson, who had directed the company with her as co-zo, came out that same month. It is not clear why. Neither she nor the company commented on their departure. Since then, Teefey – who managed Gomez’s career for many years – took full control. According to her profile on LinkedIn, Teefey was president of July Moon Productions, in charge of Gomez’s film, TV and music projects until 2014, and then CEO of Kicked To the Curb Productions, producer of the Netflix series 13 Reasons Why (Gomez was an executive producer of that show).
These two employees argue that Teefey did not have operational knowledge so that the brand was successful. According to them, Teefey rejected key agreements with brands if they required their daughter to participate, including one of several million dollars with Airbnb, which contributed to financial problems.
Emma Wright, Teefey Cabinet Chief, described the version of the failed agreement with Airbnb as “extremely misleading” but declined to give more details. “People who think that may not understand what happens behind the scenes in the negotiations,” he said.
Wright also defended Teefey’s leadership. “What I have seen is a person who has led with pure grace,” he said. “He has fully focused on preserving the support of the team and maintaining the growth of the company.”
Gomez, meanwhile, does not have an active role in Wondermind. On the website it appears as Chief Impact Officer. “We have to fight with your agent to do anything for us, and it rarely does it. And for ‘doing something’ I mean publishing something on Instagram or granting an interview that generates traffic,” said an employee. He said Gomez only met with the team once in three years. A company spokesman said that “absolutely is not true” and said that Gomez’s participation “speaks for itself.”
Although the problems were already being taken, they exploded on March 31 when the employees did not receive the payment corresponding to the second half of the month. That same day, Teefey sent them an email entitled “Important Update”, informing them that their health provider, Sequoia (not related to the risk capital firm that invested in Wondermind in 2022), had canceled the medical, dental and vision benefits since March 15, two weeks before, according to a copy of the message reviewed by Forbes.
“We regret to send this email on a day of well -being,” Teefey began, attributing the problems to a delay in a payment by an investor. “As you know, we have been working tirelessly to ensure our next investment round,” he wrote. “An investor who was ready to provide crucial bridge funds last week failed to transfer on time.” He added that the closing of the B series was imminent: “Although we have almost US $ 8 million committed in series B and the investor still works to send the funds, we are in a situation that we had worked hard to avoid.” (The B series has not yet been announced).
In that same email, employees were informed that they would have to take advantage of coverage. Cobra is a federal law that allows certain people to temporarily maintain their medical insurance after “qualifiable events” such as layoffs or reduction of working hours. Although the mail did not announce any change in their schedules, the employees had to cover both their part and that of the company in the insurance payments, and would be reimbursed “once we close the round.”
The next day, at a general meeting recorded and shared with ForbesTeefey tried to calm the spirits blaming a “legal mishap” for payroll and health problems, and said it would soon be solved. He did not appoint the investor, but said that if he could, she would have covered the payments.
An employee expressed concern about the reduced of the B series round, to which Teefey replied that the round would be between US $ 20 million and US $ 30 million. “We want to close the round as soon as possible to settle all debts, to suppliers, employees, any person we should money. We want to do it to move on,” he said on the call of April 1. He also pointed out that they would launch an app, seek profitability “and grow from there.”
Another employee asked if she should continue to hire freelancers despite complaints about backward payments. “I’m worried about sending assignments without knowing if they are going …”, he began to say. “… receive payment or not,” Teefey intervened, recommending being conservative but not stopping the projects.
Three days later, on April 4, at another general meeting, Teefey changed the tone. The Coo Bhavik Trivedi, former vice president of operations of the Away Linding brand, began by saying that “the money is on its way” and would arrive that day or beginnings of the following week. Teefey then announced that they had secured funds to pay until the end of the month, but asked to pause all the projects. “We are not going to spend a dollar in the month of awareness of mental health,” he said referring to May. He pointed out that the company had not operated with strict budgets before and that it was hard for them to lift capital because investors saw “vanity metrics” and no proof that we “retained the consumer.”
The employees were paid for the second half of March and the first of April through two bank transfers, and received at least part of the reimbursement for health insurance payments, as confirmed by two employees. However, Wondermind failed again in the payroll of April 30, and has not paid since then.
The last update arrived on Thursday afternoon when Teefey announced at another general meeting that he had taken a loan on his house and that the company was in the process of paying off all its debts with employees, suppliers and freelancers. He said the payments would be made on Friday and that the money would reach until the end of the month. Beyond that, he pointed to series B: “We are still in negotiations,” he said.
But on Friday, Trivedi wrote in Slack that, although the money for the payroll had been received, he arrived “after the cut of transfers of the same day” and that the money would reach the employee accounts at noon on Monday.
This has left employees concerned with a new delay – and for the viability of the company. “Even if this loan comes, with debt and what is due to all, maybe it is possible to pay … but then what?”
“To be fair, I think Mandy believes in this company until excess,” added another person. “It has good intentions. But many promises have been broken. There is always a new great opportunity on the horizon … but it never comes. It saddens me to see that we finish like this.”
On the participation of his famous co -founder, the employee concluded: “Until recently I felt safe knowing that Gomez was co -founder. But it seems that his involvement is minimal or non -existent at this time … or we would probably not be in this situation, right?”
This article was originally published in Forbes US
