Once upon a time, seeking the services of a mental health therapist was taboo. But these days, it’s not only mainstream to have a therapist, it’s actually considered “cool” in some circles.
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Obvious Ventures (which we profiled earlier this year in this piece) also participated in the round along with existing investors. It brings the company’s total raised to $14 million. (Octave previously raised a $3 million seed round from Felicis Ventures and angel investors in April 2018.)
Sandeep Acharya, the former head of strategy at One Medical, started Octave in January 2018 with the goal of making mental health services more accessible to the general population. He says he was inspired to found the company after seeing a close friend suffer from anxiety and depression due to a traumatic experience. Acharya saw a huge gap in access to high-quality behavioral health services and came to the conclusion that the process of finding a great therapist is “arduous and long.”
“A lot of what I did there [at One Medical] was look after employers and understand their needs, and something stuck out at me,” Acharya told me. “It was how many people were dealing with depression, and just how poorly they were supported by the community. I got excited to focus on trying to reinvent the way mental health is delivered.”
The opportunity is certainly there. Acharya cites statistics from the 2019 State of Mental Health in America report indicating that 56.4 percent of adults with a mental illness “never receive treatment.“
How It Works
Octave operates evidence-based therapy practice virtually as well as in physical locations in New York and San Francisco. It aims to match people (its target market is “busy professionals,” couples and new parents) with “the right therapist” using technology “to power information collection.” Besides individual therapy, Octave offers group therapy, coaching and psychiatric services. It also has developed some content and assessment tools, including one that will attempt to measure the impact of therapy.
“Our goal is to provide mental health services that are more personalized for each individual,” Acharya told me. “We’re building a lot of tools for clinicians to be more effective at offering therapy, including some that measure how people feel before, during and after treatment.”
Coinciding with its funding announcement, Octave, which at first opened accepting cash only, has inked a deal with Anthem Blue Cross of California to serve its patients as an in-network provider. The agreement is the first of many Octave hopes to make with insurance companies, according to Acharya, as part of its goal of making therapy more accessible and affordable.
“One of the hardest things about getting good mental health care,” Acharya said, “is finding a therapist that will take your insurance. It’s a problem we’ve solved and are continuing to solve.”
Over time, One Medical has become one of the largest independent primary care practices in the United States. It’s Acharya’s hope that Octave becomes one of the largest independent mental health care practices in the country. One notable difference between the two companies, Acharya said, is that Octave is not a concierge service and thus does not require a membership fee.
Greycroft Partner Ellie Wheeler says her firm “spent about 18 months” looking at startups in the mental health space before deciding to back Octave.
“We saw eye to eye on the importance of the market in terms of the fundamental shift that is taking place with the reduction of the stigma of seeking care, especially for a younger cohort of consumers, and the need for access,” she told Crunchbase News.
Also, the fact that it is not a concierge service was appealing to Greycroft.
“We weren’t interested in an offering that only 1 percent of the population could use,” Wheeler told me. “We liked that Octave is offering something that ultimately will be available for a broad swath of the population.”
The company plans to use its new capital to open more locations in California and New York in the short term, and it’s eyeing other locations in 2021. Specifically, the company is also opening its first San Francisco location at 625 Market St., and second New York spot in early December. It also plans to hire more staff. (Octave’s therapists are either part-time or full-time, and are salaried, not contract workers).
In general, startups focused on improving mental health are increasingly seeing more investor interest. In February, meditation app Calm closed on an $88 million Series B round that propelled it into unicorn status with a $1 billion valuation. Also, in May, we reported on Talkspace, which connects those needing help to a network of therapists through a digital app, raising $50 million in a Series D.
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