Venture funding in the overall health tech market fell 27% from 2022Read more...
Some companies have continued to raise funding, while many have had to cut staff
If there was a silver lining to the pandemic, it's that it spurring innovation and adoption of mental health tools, as every age group, racial and ethnic group, every gender, was impacted negatively by the pandemic.
As such, a number of companies in the mental health space saw their engagement skyrocket in 2020 and 2021, along with huge amounts of funding, as the nation grappled with what was happening around them. In 2021, mental health companies brought in $5.5 billion globally, across 324 deals, a 139% increase year-to-year.
Alas, the good times couldn't last forever: once the pandemic ceased, digital health funding began dropping, and funding to mental health companies fell 60% in the first quarter of 2022; total funding for mental health tech companies fell 53% to $2.6 billion and 286 deals for the full year.
During the pandemic, BetterUp, which combines coaching, AI technology, and behavioral science, raised two big funding rounds: first, a $125 million round in February 2021, followed by $300 million in October of that same year, valuing it at $4.7 billion, increasing its value by seven times in seven months.
The organization also grew its entire customer base by 80 percent, recorded a net revenue retention rate of over 170%, and reached $100 million in annual recurring revenue. BetterUp has also grown its coaching network to over 3,000 coaches, expanded the number of behavioral scientists by 50 percent, doubled corporate employee headcount to over 500, even brought on Prince Harry as its first Chief Impact Officer.
Since then the company has slashed its workforce by roughly 16% after it failed to meet its revenue projections, while falling under scrutiny over what exactly Harry does at the company (apparently, not much). That was preceded by what the Daily Beast referred to as an internal “revolt” in 2022, after the company changed the pay structure for its coaches, resulting in a pay cut.
In better news, BetterUp entered into a number of partnerships over the last year, including with the International Coaching Federation, an organization of trained professional coaches; Carahsoft, which sells IT hardware, software and consulting services to federal, state and local governments, and educational institutions; and Microsoft Viva, an employee experience platform. The company also launched BetterUp Manage, an AI-powered solution for businesses.Vida Health operates on the idea that mental and physical ailments are not separate issues, but rather intertwined. It treats chronic diseases all along the spectrum, from low acuity cases to high acuity conditions, such as hypertension, obesity, and diabetes, as well as mental health problems, such as depression.
The company raised a $25 million round in April 2020, and then another $110 million in may 2021. In between those two rounds Vida more than tripled its revenue, in part due to a 6,000% increase in therapy sessions. In addition the company was also selected to be a part of CVS Health's Point Solutions Management service.
In November of this year the company announced that it had raised a $28.5 million round of funding and that it has appointed Joe Murad as its new CEO, succeeding founding CEO Stephanie Tilenius.
Other developments in 2023 included a partnership with Withings Health Solutions, as well as a partnership with Capital Rx, a full-service pharmacy benefit manager and pharmacy benefit administrator, launch of Rx Activate to provide its clients with access to additional resources and options to help manage cardiometabolic conditions via personalized virtual care.Lyra Health, which helps companies improve access to effective mental health care for their employees, raised a heap of money during the pandemic across multiple rounds: $75 million in March 2020; $110 million in August 2020; $187 million in January 2021; and $200 million in June 2021, brings the company's total funding to $680 million at a $4.6 billion valuation, doubling its $2.3 billion valuation from six months earlier.
The company more than doubled its customer base in 2020, serving more than 2.2 million members globally by mid 2021. During that time, the company launched Lyra Blended Care, combining video therapy sessions with personalized digital lessons and exercises based on Cognitive Behavioral Therapy principles. Lyra also announced a partnership with Calm, allowing Lyra's employer partners to offer Calm as a benefit to their employees.
Since then Lyra has raised another $235 million, and it acquired ICAS World, an employee assistance program provider with operations in more than 155 countries. Its annoucements this year included the launch of benefit recommendations will be personalized to each member, a partnership with Accolade in which Lyra was add to its Trusted Partner Ecosystem, a collaboration with disability and absence management services provider MetLife, and the launch of Lyra Clinical Research, a dedicated team to expand Lyra's research in evidence-based behavioral healthcare.
In addition, Walmart unveiled a mental health education and support effort for its employees which is facilitated by clinicians from Lyra Health.Alma, a membership-based network for mental health care providers, raised a $28 million round in February 2021, and a $50 million round in August 2021.
The company continued to raise funding after the pandemic ended, with a $130 million round in August 2022, bringing its total funding to over $220 million.
In 12 months, Alma grew its network of physicians over 3X to 8,000 mental health providers, who are licensed to practice in all 50 states. By early 2023 it had 11,000 providers on the platform. Brightline provides behavioral healthcare services for children and their families. The company raised $20 million in August 2020 and $72 million in June 2021. It has since raised another $115 million. As of early 2022 Brightline was serving 50 employers and covering over 24 million health plan lives.
The last year has been mixed for Brightline: on the positive side, the company partnered with Evernorth, making its services available to all of Evernorth’s employer clients across all 50 states. The company was also recently selected by The California Department of Health Care Services to support the delivery of behavioral health services for more than six million young kids and their families at no cost, beginning in January 2024.
On the less positive side, Brightline cut 20% of its workforce in November, and then did the same six months later. Even worse, it suffered a data breach that impacted over 783,000 of its patients. Cerebral, a mental health telemedicine company, raised $35 million in October 2020, followed by $127 million in January 2021 and $300 million in December 2021, bringing the company's total funding to $462 million at a $4.8 billion valuation.
Within just 15 months of launching, Cerebral was operating in every state in the U.S. with the ability to provide therapy services to over 70% of the population. The company also debuted its mobile app, launched digital cognitive behavioral therapy, and introduced in-network insurance coverage. The company grew to over 2,000 team members in that time.
2023, however, saw the company get caught in a number of scandals: in February it announced it would cutting its workforce by about 15%, its third round of job cuts in less than a year following the laying off of 20% of its employees the previous October.
This came as Cerebral began facing investigations from various authorities, including the FTC, into whether it engaged in deceptive or unfair practices related to advertising or marketing of mental health services. That same month a bipartisan group of U.S. Senators called on Cerebral, among other companies, to protect their patients’ sensitive health data, expressing concern over reports they were tracking and sharing their customers’ personally identifiable health data with social media platforms for advertising purposes. In March, Cerebral revealed it shared the private health information of over 3.1 million patients with advertisers and social media companies, including Facebook, Google, and TikTok.
Cerebral recently announced the launch of Cerebral Way, a new personalized approach in which its clinicians work to understand the unique needs and experiences that will shape an individual’s path towards mental wellness. That includes personalized therapy and medication treatment plans.Spring Health, which provides a mental health solution for employers and health plans, raised $22 million in January 2022, and $76 million that November, followed by $190 million in September 2021 at a $2 billion valuation. In the year prior the company has seen approximately 6x revenue growth, reaching more than 2 million employees worldwide.
Since then, the company has raised another $71 million for a $2.5 billion valuation.
In the past year Spring Health has launched a mental health care experience for teens; introduced Atlas, a connected platform for Human Resources teams and benefits leaders to optimize program outcomes and maximize ROI for behavioral health; launched specialized eating disorder support for Spring Health members and their families; partnered with Highmark Health to expand the number of access points to behavioral health care by 40% for Highmark insurance members, including children and teens; and announced a new suite of services to enhance its existing Family Care solution, which provides care and support for parents, caregivers, partners, and children from birth to adulthood. SonderMind is a digital behavioral health and telehealth company that puts big data to use, not only to match therapists and patients, but to provide therapists with a suite of applications that generate a lot of data. The company raised $27 million in April 2020 and then $150 million in July 2021. In between the company saw its revenue grow 400%, and began providing mental health access for more than 73 million Americans.
It has since made two acquisitions, purchasing predictive analytics platform Qntfy in October 2021 and buying Total Brain, a neuroscience-based mental health and brain performance app, in November 2022. Earlier this year it also bought Mindstrong's tech assets.Mindstrong, a virtual mental health platform, thrived during the pandemic, raising $100 million in May 2020, bring it total raised to over $160 million.
However the company told users in January of 2023 that it would cease offering its patient care services in March. In February it laid off 128 employees, include the company’s CEO, chief financial officer, chief technology officer, and that it would be permanently closing its headquarters in Menlo Park, before selling off its assets to Sondermind in March.
According to STAT, Mindstrong's idea was to “develop a ‘biomarker’ that could passively analyze users’ typing speed, typos, and tapping and scrolling patterns for early signs of cognition and mood changes indicating conditions like depression. If effective, the system could help them get therapy or other treatment faster, and save insurers money on more intensive mental health care in the long run.” However, health workers “expressed concern that Mindstrong’s predictive technology didn’t work." In addition, the company was also criticized for a lack of transparency with patients in regards to data collection.Headspace Health is the result of a 2021 merger between Ginger, a provider of on-demand coaching, therapy and psychiatry for people struggling with their mental health, and meditation app Headspace, combining their technology and their team.
Prior to the merger, Ginger had raised $50 million in August 2020 and a $100 million round in March 2021 that valued it at $1.1 billion. The company grew its revenue by approximately 3x over the prior year, while demand for Ginger’s coaching services and clinical services also increased up to 3x, while it also also nearly tripled its employee base and increased the number of people who have access to Ginger to over 10 million. Meanwhile Headspace had raised $93 million in February 2020 and $47.7 million in June 2020.
That gave Headspace Health over 100 million users in 190 countries, while its enterprise brands, Headspace for Work and Ginger, are distributed through over 4,000 enterprises.
Earlier this year Headspace Health announced it was expanding its services to the rest of the globe by partnering with organizations headquartered outside of the U.S. for the first time, with the United Kingdom being the company's first stop.
In July, the company laid off 15% of its workforce, of 181 employees, following the cut of 4% of its workforce, or approximately 50 workers, in December. That same month it closed a $105 million senior debt facility with Oxford Finance.
(Image source: abcnews.com)
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