Digital sleep therapy platform Stellar Sleep raises $6M

Steven Loeb · February 6, 2024 · Short URL:

The company uses a psychology-based methodology to break the insomnia cycle

Over 25 million Americans suffer from chronic insomnia, meaning sleep problems at least three nights a week for at least three months. This can lead to both mental and physical health issues, ranging from trouble concentrating to sleep apnea to heart attacks.

For many people suffering from sleep issues, the first step is online searching, where they find superficial advice like cutting caffeine, keeping a regular bedtime, and trying meditation, said George Wang, co-founder and CEO of Stellar Sleep, a digital solution for chronic insomnia management that announced a $6 million seed round on Tuesday.

"The best way to manage chronic insomnia is using a psychological approach called 'sleep therapy,' which addresses the root cause of insomnia and helps the patient re-learn how to sleep well again," he said.

While primary care physicians (PCPs) know that sleep therapy is the gold standard treatment for chronic insomnia, Wang explained, many are not able to refer their patients to sleep therapists because there are only roughly 600 trained sleep therapists in the U.S., most of whom are not accepting new patients due to demand or have waiting lists six months or longer.

Meanwhile, some PCPs will prescribe sleeping pills like Ambien, but sleeping pills aren’t indicated for long term use and stop being effective over time. At this point, many chronic insomniacs give up and think they need to just live with it.

Stellar Sleep helps these patients by offering them a mobile app that helps break the insomnia cycle using a psychology-based methodology.

Here’s how it works: users download the app, create an account, and complete an onboarding assessment that allows Stellar Sleep to understand the comprehensive picture behind their sleep issues. Users can also connect their wearables to provide an even more complete view of their sleep and well-being. Next, Stellar Sleep builds each user a custom, interactive program that guides them daily, and as needed in the middle of the night, to learn how to sleep well again. The program gets progressively more personalized based on the user’s sleep stats.

Finally, Stellar Sleep helps users manage the user’s chronic sleep issues over the long run using psychology. This includes a combination of proven psychology techniques, for example cognitive behavioral therapy, acceptance and commitment therapy, that addresses the user’s root causes of insomnia, such as anxiety or burnout, and provides them with the tools to manage those root causes, so they don’t interfere with their day-to-day life and sleep.

Currently, Stellar Sleep has thousands of active users and has collectively helped them sleep more than 1 million additional hours. The company did a study of over 500 users, and found that Stellar was 50% more effective than sleeping pills. Today, its users typically start to see results in two weeks.

The new funding was led by Initialized Capital with participation from Y Combinator, Lombardstreet Ventures, Switch Ventures, Moonfire Ventures, Scrum Ventures, 8vdx and Goodwater; it will be used by Stellar Sleep, in part, to expand the company's capacity and reach. That means growing its 10 person team, specifically around software engineering and clinical roles. It has also started working with a number of distribution partners including clinician groups, such as PCPs, sleep centers, such as sleep study facilities, and sleep wearable manufacturers.

"We’ve realized that there is a lot of unmet need out there and a lot of our partners are excited that there’s finally a way for them to provide their patients and users with the support they need," said Wang. 

In addition, it will be used to build more comprehensive content and personalization of the user experience and to expand content offering to cover more root causes of chronic insomnia; Stellar already has content on the app that addresses some of the causes of insomnia, such as anxiety, burnout and mood disorders, but it's now partnering with sleep clinicians to make sure that its content remains relevant and accurately reflects the evolving types of insomnia cases that they see in their clinical practice.

"We also want to provide a more personalized experience for our users. The type of insomnia that is experienced by a young, working professional will be different from the insomnia experienced by someone who’s in their 60s," Wang explained.

"Similarly, new parents, postpartum women and shift workers experience insomnia very differently. We want to create a tailored experience for our users, so that the type of care they get on the app is personalized to their individual needs and they can go through the content in the app at their desired pace."

Finally, the company want to improve adherence on the app, as behavioral changes take time, something that is especially so for chronic insomnia, which is developed over a long period of time and there’s no quick or easy fix. The company is now starting to look into Duolingo-style gamification to improve adherence, and to do so in a way that doesn’t exacerbate anxiety.

"From day one our goal has been to create a product that was not only engaging but actually works for our users. That’s why we measure the clinical insomnia severity of our users on a regular basis using validated sleep instruments and are constantly improving our program with the latest in sleep research and from what we hear in the field from our network of sleep clinicians," Wang said.

"We see consistent improvement in efficacy over each quarterly cohort of users coming in and using our program." 

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