While billionaire Selena Gomez enjoys unprecedented success with her Rare Beauty empire, her mother Mandy Teefey was forced to mortgage her home to pay employees at their mental health startup Wondermind after the company missed multiple payrolls.
Key Takeaways
- Wondermind CEO Mandy Teefey reportedly took out a loan against her home to cover missed employee paychecks and payments to vendors and freelancers.
- Contradicting reports claim Selena Gomez, upon learning of financial difficulties, invested additional millions into the company she co-founded but doesn’t manage day-to-day.
- The mental health startup, valued at $100 million after securing $5 million in funding in 2022, began experiencing financial troubles in January 2023 when Teefey became sole CEO.
- Employee health benefits were terminated in March, with staff advised to transition to costly COBRA coverage while still missing paychecks.
- Wondermind’s spokesperson claims the financial situation “has been rectified” and all owed payments will be made, attributing issues to typical “startup growing pains.”
Financial Crisis Hits Celebrity-Backed Mental Health Venture
Wondermind, the mental health startup co-founded by billionaire Selena Gomez and her mother Mandy Teefey, has fallen into serious financial distress. Reports indicate the company has been struggling to pay its approximately 15 employees, along with numerous vendors and freelancers. The situation became so dire that employees missed multiple paychecks, with staff receiving compensation for only one of two missed pay periods, while freelancers and vendors remain owed “hundreds of thousands” in outstanding payments.
The financial troubles reportedly began in January 2023 when Teefey assumed the role of sole CEO. Former employees alleged that Teefey lacked the necessary business acumen to lead the company successfully, with some claiming she turned down potentially lucrative brand deals involving her daughter Selena Gomez. The company’s chief of staff disputed these claims, defending Teefey’s leadership during this challenging period.
Mom Takes Extraordinary Measures While Billionaire Daughter Stays Distant
In a desperate move to keep the company afloat, CEO Mandy Teefey reportedly took out a personal loan against her home to pay the company’s mounting debts. This extraordinary step came as employees faced not only missed paychecks but also the termination of their health benefits in March, when they were advised to pursue expensive COBRA coverage despite not receiving regular pay. The company also owes approximately $60,000 to a PR firm among other outstanding vendor debts.
“To invest in the future of the company, Mandy has chosen to take the lead here with a personal loan to invest in the future of the company,” a source told PEOPLE.
Curiously, while her mother mortgaged her home, Selena Gomez – who reached billionaire status in September 2024 largely due to her successful Rare Beauty makeup brand – has maintained distance from the company’s operations. Employees claimed Gomez only met with staff once in three years, an allegation her representatives deny. This hands-off approach raises questions about the celebrity co-founder’s commitment to the company’s mission despite her enormous wealth.
Conflicting Claims About Financial Support
Adding to the confusion, conflicting reports have emerged about how the company’s financial crisis is being addressed. While some sources confirm Teefey’s personal loan against her home, others claim Selena Gomez has stepped in with additional investment after learning of the company’s troubles. What remains clear is that the company’s ambitious $100 million valuation following a $5 million funding round in 2022 has not translated into sustainable operations.
“Selena has invested millions of dollars over the years into Wondermind to support her mother and their shared passion for mental health, including when she was alerted about the most recent financial setback, and immediately invested more money as she’s not involved in the day-to-day operations,” a source told PEOPLE.
The irony of a mental health company causing significant stress to its own employees and contractors by missing payments and terminating health benefits has not been lost on observers. In one particularly tone-deaf moment, Teefey sent an email about the company’s funding challenges on a designated wellness day for employees, later apologizing for the poor timing while workers still wondered when they would be paid.
A Path Forward?
Wondermind, founded in December 2021 to provide a safe online space for discussing mental health struggles, continues to offer podcasts, newsletters, and essays on mental health despite its financial troubles. A company spokesperson insists that the situation “has been rectified” and all owed payments will be made, describing the financial issues as typical “startup growing pains” as the company prepares to transition into a new chapter.
“Like many startups, Wondermind has been working through its own set of growing pains,” stated Wondermind in an official response to the financial crisis allegations.
Whether the company can recover from these significant setbacks remains to be seen. With Teefey personally leveraging her assets and conflicting reports about Gomez’s financial involvement, the future of this celebrity-backed mental health venture appears as uncertain as its current financial state. What is certain is that those who suffered most were the employees and contractors dedicated to the company’s mission of destigmatizing mental health discussions.
