Mental Health App Raises $50 Million for Expansion
By Jonathan Lamantia Crain’s Health Pulse May 30, 2019
Online therapy company Talkspace has raised $50 million in a Series D round to expand its national network, the company said Wednesday.
The Midtown company, which connects people to licensed therapists through a desktop and mobile application, also announced it has reached a deal with Optum's behavioral health business. Optum is division of UnitedHealth Group.
The company said it will also use the funding to expand its offerings for employers, health plans and employee assistance programs who can provide the service as part of their benefit packages.
It has previously partnered with Aetna, New Directions Behavioral Health and Magellan Health to offer the service to employees with those benefit providers. Five million people are covered under Talkspace's commercial relationships.
Dr. Neil Leibowitz, chief medical officer at Talkspace, said the company will use the funding to "to focus on our relationships with payer and businesses.
"Employers have started to notice the importance of mental health in the workplace and have contracted with us directly to offer the benefit for mental health care outside of their insurance and employee assistance program," he said.
For individuals, the company offers unlimited text, video and audio messaging with a therapist, who responds daily for five days a week, which is billed as $196 a month, with automatic renewals. Adding live sessions costs extra and couples therapy is available for $79 a week. Individual live sessions cost $49 for a 30-minute session. Users have access to the same therapist each time they access the service.
It is covered by some insurance plans with other users reimbursing themselves for care using a Flexible Spending Account. While potential users might be deterred from spending money outside of their insurance benefits, some mental health professionals opt not to participate in insurance networks.
"I think it’s a creative approach consistent with the age we're in. But relationships are key to good therapy," said Harvey Rosenthal, executive director of the New York Association of Psychiatric Rehabilitation Services. "I'm not sure the depth of relationships that can be formed in this electronic, remote way."
Talkspace founded in 2012, said its total funding to-date is $110 million.
The financing was led by Washington D.C.–based Revolution Growth which has previously backed companies including Convene, Sweetgreen and DraftKings. Patrick Conroy, a principal at Revolution Growth, will join Talkspace's board.
"The progress they've made thus far underscores the overwhelming demand for greater and easier access to mental health services," Conroy said in a statement. "Affordable, convenient, and high quality care is a critical need for tens of millions of Americans and our partnership will help ensure that treatment can be available at the click of a button."
Existing investors Norwest Venture Partners, Qumra Capital, Spark Capital and Compound Ventures were among the other contributors to the round.
Talkspace is competing with other telemedicine providers, such as Purchase-based Teladoc. Jason Gorevic, Teladoc's CEO said during an earnings call earlier this month that the company's mental health volume in the first quarter increased by more than 100% compared with the same quarter in 2018, calling it "a strong testament to the value of this much needed service."