Health, Wellness & Biotech

Mental Health Platform Alma Raises $130M During Therapist Shortage

Illustration of man with mental issues looking at smartphone.

Thanks to a cultural shift in the perception of mental health, demand for therapy has soared, and has only gotten higher after a pandemic-era widespread adoption of teletherapy.

But demand has far outweighed supply of in-network therapists that accept insurance. A survey from the California Association of Marriage and Family Therapists estimates 42% of therapists in the state don’t accept insurance, which requires patients to pay often upwards of $100 per session out of pocket.

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New York-based Alma announced Thursday it raised $130 million in Series D funding to get more therapists into insurance networks. The round was led by Thoma Bravo with participation from Cigna Ventures and existing investors like Optum Ventures and Tusk Venture Partners, bringing total funding to $220 million.

Alma is a membership-based platform that allows independent therapists who run their own practices deal with administrative tasks like setting up insurance and billing. Therapists also get access to teletherapy software, scheduling tools and other colleagues who are part of the network.

Insurance reimbursement rates are often incredibly low and don’t pay as well as private therapy does, requiring therapists to see more patients a week and leading to burnout and a decline in quality of care. There’s also the mountain of paperwork associated with being part of just one insurance network, and billing that insurance network.

Alma aims to help with the latter. Therapists pay a monthly fee to join the network, and the company says it can get therapists credentialed with major insurance networks in less than 45 days by providing expedited assistance. It also promises higher payback rates.

The four-year-old startup has onboarded 8,000 therapists to its platform.

Ripple effects of teletherapy.

Pandemic-era therapy startups like BetterHelp and Talkspace often took the form of a teletherapy platform.

But the explosion of teletherapy has led to a second wave of startups addressing the growing pains of a transitioning industry. Per Crunchbase data, teletherapy startups surpassed $1 billion in venture investment for the first time in 2020.

Motivo Health announced in late August it raised $14 million to help therapists get licensed, accelerating the process to meet increasing demand for therapists by patients. Another, SonderMind, raised $27 million in 2020 to create bespoke matches between therapists and patients.

Illustration: Dom Guzman

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