Mental health continues to be a growing health care need, made especially prominent today as millions of Americans isolate at home to avoid contracting COVID-19, and who now must use telehealth capabilities to communicate with their physicians.
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However, 80 percent of patients can’t afford mental health therapy without help from insurance, according to Mark Frank, co-founder and CEO of SonderMind.
The Denver-based company wants to help consumers with mental health benefits from commercial insurance to access in-network opportunities with its 500 community behavioral health professionals. On Monday, the company got closer to its goal after raising $27 million in a Series B round of funding led by new investor, General Catalyst.
“We want to democratize mental health, enabling consumers to use the insurance benefits that they are paying for,” Frank told Crunchbase News. “The client can go to a single spot and engage with technology and a therapist. We have contracted and partnered with major health plans in the markets in which we operate, and our clinicians become in-network with those insurance providers. In addition, we are helping those clinicians provide great clinical care, and we take care of all the rest.”
The Series B financing brings the company’s total raise since its 2017 inception to nearly $33 million, according to Crunchbase data. In addition to General Catalyst, the Series B includes new investor F-Prime Capital, along with existing investors Kickstart Seed Fund, Diōko Ventures (managed by FCA Venture Partners) and Jonathan Bush, founder of AthenaHealth, who joined SonderMind’s board of directors last year. The company last raised $5.9 million, including $3 million in a Series A round in April 2019.
Along with the new funding, SonderMind adds Eric Roza, former CEO of Datalogix and current General Catalyst executive in residence, and Kent Thiry, former CEO of DaVita and current executive chairman, to its board.
SonderMind initially planned to launch its telehealth service in the second quarter of 2020, but when the COVID-19 pandemic hit, Frank said the company shifted resources to release it two months ahead of schedule, on March 18.
“It was all hands on deck to move mountains to launch,” he said. “When we get through the current environment, we hope clients go back to seeing their therapists in person and engaging with the online messaging and video capabilities.”
The company is growing steadily, Frank said, building an employee base of more than 70 people from 20 last year. As the company continues to build out its infrastructure, he expects to add staff on the product and engineering side as well as in clinical programming.
Although Frank did not disclose revenue, he said the company grew 1,000 percent over the last year.
“Obviously, we are trying to keep up the pace and continue to aim pretty high,” Frank said.
In addition to a large presence in Colorado, SonderMind entered Texas and Arizona last year, and with this Series B, intends to continue its expansion in these states and target new markets in the Midwest, mountain and West Coast regions, Frank said.
The company also plans to use funding for product development and to improve technology for therapists and clients, with a goal of improving clinical outcomes and efficacy of care, Frank said. SonderMind will also build and develop integration that will broaden its enterprise partnerships with payers, employers and health systems.
One program already garnering positive feedback from therapists is the company’s guaranteed pay program, which promises funds in a therapist’s account within 24 hours after a patient visit, he said.
“There is no risk from a financial perspective,” Frank said. “That is a huge win for most therapists, particularly in this environment when many of them are wondering how they are going to make ends meet.”
As frustration grows for individuals who are unable to access mental health support, SonderMind’s platform is beneficial to both clinicians and patients, said Holly Maloney, managing director at General Catalyst.
“SonderMind changes the game by taking the friction and stigma out of finding the right therapist, all while maximizing insurance coverage and measuring the outcomes of care,” Maloney said in a written statement.
Last week, we reported that General Catalyst also led a $51 million round of funding for Olive, which helps automate administrative processes so hospital employees can focus more on taking care of patients.
SonderMind is joining a growing list of Colorado startups that have had success in attracting funding. In February, we reported that Outrider, a developer of autonomous yard operations for logistics hubs, raised $53 million in funding. Meanwhile, we took a look at the state’s venture capital scene in February 2019.
Illustration: Dom Guzman