Mental health startup Headway banked $70m in Series B funding led by Andreessen Horowitz in a bid to make mental healthcare more accessible and affordable.
The round saw additional participation from existing investors Thrive Capital, GV and Accel. The latest financing, which comes just about six months after the startup raised $26m in Series A funding, pushes Headway’s total funding raised past $100m, propelling it to a $750m valuation.
The new funding will be used to invest in new talent in the areas of engineering and business development, as well as bolster its relationships with insurance companies.
The infusion of fresh capital demonstrates the burgeoning demand for affordable mental health care and investor interest in Headway’s approach to addressing accessibility and affordability issues, according to Headway CEO and co-founder Andrew Adams.
Currently, 1 in 4 adults in the US suffer from a diagnosable mental disorder in a given year, according to Johns Hopkins Medicine. However, the main barrier to affordable care is that almost 70% of therapists do not accept insurance because of the administrative burden that comes with it. This drives up the cost of therapy, making it a herculean task for patients to get support, the firm said.
With the aim to change that, Headway provides a free software to connect patients to therapists and therapists to insurers. The goal is to make it easier for clinicians to offer in-network care by providing them with an easy way to submit claims online, eliminating paperwork burdens and giving them more time to treat patients. Patients can then also use Headway to find therapists who accept their insurance.
Commenting on the firm’s plans, Adams said, “We are breaking the vicious cycle and building a new mental healthcare system that will render inaccessibility an anachronism.
“We are proud of what we have built-in just over a year, and humbled by the grateful responses we have received from patients, therapists and insurance companies. We have created a better way for accessing mental healthcare and are working tirelessly to bring quality care to every American that needs it. State by state, we are committed to offering our solution to help solve the mental health affordability crisis. We’re just getting started.”
Headway currently works with Aetna, Cigna, United Healthcare, Oscar and Oxford and plans to continue to invest in more insurance partnerships. Using Headway, patients can book an appointment directly with a therapist within five days, compared to the 30-day average with an insurance directory.
The company has grown quickly since its inception in 2019 by servicing more than 3,000 clinicians and facilitating about 300,000 therapy appointments. Furthermore, it expanded operations from just New York to a total of ten other states including New Jersey, Florida, North Carolina, Texas, Georgia, Michigan, Virginia, Washington, Illinois and Colorado.
While the firm still has not “spent a dime of the $26m series A,” the firm leapt at the opportunity of the Series B to onboard A16Z as a partner to leverage its healthcare expertise, it said.
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