Dawn Health, a virtual clinic for insomnia, raises strategic funding round

Insomnia affects between 33% and 50% of US adults, and adds almost $95B to healthcare spending

Up to 70 million Americans are affected by sleep disorders every year, with insomnia symptoms occurring in approximately 33% to 50% of the adult population, while Chronic Insomnia disorder, which is associated with distress or impairment, is estimated at 10% to 15%. This adds an additional $94.9 billion in costs each year to the United States health care system.

Despite all of that, the average wait time to see a sleep therapist is six weeks. Dawn Health  wants to set a new standard of care for insomnia treatment, improving the therapy experience by offering virtual care via video and SMS. The company matches patients with the best coach or CBT-I-trained therapist for their needs, and complements it with technology and self-guided care plans.

On Monday, Dawn announced it raised a strategic funding round led by Kindred Ventures, with participation by Bragiel Brothers. While the company did not disclose the amount of this current round, it had previously raised a $1.8 million round in February.

When they access Dawn, patients are paired with a Sleep Therapist, following a short questionnaire, who guides them through a clinically proven program, which includes 1:1 video therapy and text-based guidance from a dedicated Sleep Therapist; interactive and clinically validated app-based CBT-I lessons; and personalized insights and sleep tracking using the Insomnia Severity Index.

Users get a free video call upon signing up, as well as 24/7 access to a sleep coach, video therapy on their own time, live sleep performance insights, and weekly sleep progress reports.

Dawn is now available at no-cost or for a co-pay for over 35 million Americans, in addition to being available on an out-of-pocket basis for patients in all 50 states. The company says most patients use Dawn for five minutes a day, and stay on the program for three months.  

Users who followed the program for 1 month or more reported needing 75% less time to fall asleep, 80% less time awake in the middle of the night, a 60% decrease in insomnia symptoms, and a 90 minute increase in total sleep time. 

They also get connect with a specialist faster than with traditional therapy: the average wait time to see a sleep therapist on Dawn is less than two days, while patients also begin reporting better sleep in about two weeks, compared to five weeks with traditional therapy. 

“Making quality sleep therapy accessible and affordable to every American is core to our mission,” Dawn Health CEO Rahul Shivkumar said in a statement. “Getting payor coverage in a few states is a good start, but we plan to expand to cover most American lives by 2025.”

Venture capital funding in the sleep space

Venture capital funding into sleep-related technology and products grew from $375 million in 2017 to $488 million in 2020, and there was $747 million invested in the first nine months of 2021.

That includes sleep tracking weable Oura, which has raised $148.3 million from investors that include Lifeline Ventures, Forerunner Ventures, Temasek, The Chernin Group, JAZZ Venture Partners, and MSD Capital; its most recent round, raised in April, valued it at $2.55 billion. 

There's smart mattress company Eight Sleep, which has raised $162.1 million, including an $86 million round last year; Clair Labs, developer of a monitoring system that analyze critical health-related parameters during sleep, which has raised $9 million; SleepScore, a company helping organizations build sleep offerings using advanced data and sleep science technologies, which has raised $6 million; at-home sleep lab provider Wesper, which raised $9.6 million last month; Nox Health, a provider of sleep diagnostic technology solutions, which recently raised a strategic investment from Vestar Capital.

(Image source: dawn.health)