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As demand for mental health services soars, SonderMind raises $27 million to expand its services
“Our real focus is on democratizing mental healthcare,” says SonderMind co-founder chief executive, Mark Frank.
His company, founded back in 2017, is having a moment. With the restrictions and economic stresses caused by the government’s efforts to mitigate the spread of the COVID-19 epidemic in the U.S., demand for mental health services is soaring. And it’s compounding what was already a mental health crisis in the U.S.
A 2019 article from Bloomberg Businessweek laid out the scope of the problem in stark terms. In 2017, 47,000 people died by suicide in the U.S. and there were 1.4 million suicide attempts — a suicide rate that’s the country’s highest since World War II, according to the Centers for Disease Control and Prevention. Drug overdoses, another measure of the nation’s anguish, killed 70,000 people in 2017. Another 7% of U.S. adults reported suffering at least one major depressive episode in 2018.
Taken together, the data points to a tremendous health problem. One that the current healthcare system is only now grappling with.
SonderMind’s chief executive sees his company as part of the solution.
Most mental health practitioners don’t operate within a healthcare network or take insurance, which means that the only folks with access to care are the ones that can afford the high price of therapy. SonderMind changes that equation by offering practitioners a toolkit and back office services so they can bill insurance providers and take care of the operational side of running a healthcare practice. It also acts as a funnel, gauging the needs of potential patients and connecting them to the therapists that are best suited to provide them the care they need. That lets practitioners focus on seeing patients, the company said.
The company currently counts 500 providers on its marketplace, which operates in Colorado, Arizona and Texas, and has raised $27 million in its latest round of financing to extend its services to other parts of the U.S.
The San Francisco-based investment firm General Catalyst led the financing, which also included additional new investors F-Prime Capital and participation from previous investors like the Kickstart Seed Fund, Diōko Ventures (managed by FCA Venture Partners) and Jonathan Bush.
“This financing provides the fuel to support our growth objectives and advance our mission to make behavioral health more accessible, approachable and utilized by building a modern marketplace that holds great appeal to both clinician and patient,” said Frank in a statement.
The investment extends General Catalyst’s funding into healthcare services in recent years and represents a continued emphasis on healthcare services for the firm. “Healthcare is obviously a really important thesis for GC as a whole,” says Holly Maloney, a managing director at General Catalyst. “This is going to be one of the largest value drivers for VC this decade.”
General Catalyst already had a robust portfolio of healthcare-focused companies — including Livongo, OM1 and Oscar Health.
For Maloney, the investment in SonderMind grew out of the firm’s exposure to mental health investment through another portfolio company, Mindstrong Health. “Mindstrong forced us to explore… access to care and finding care,” says Maloney.
The General Catalyst investor sees the investment in SonderMind as also helping to open doors for more people to join the profession.
“It helps people to start their business for sure. It helps more people pursue it as a career path,” she said. And that’s good for a country where more mental health professionals and better access to care are desperately needed.
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What tech gets right about healthcare
Why is tech still aiming for the healthcare industry? It seems full of endless regulatory hurdles or stories of misguided founders with no knowledge of the space, running headlong into it, only to fall on their faces.
Theranos is a prime example of a founder with zero health background or understanding of the industry — and just look what happened there! The company folded not long after founder Elizabeth Holmes came under criminal investigation and was barred from operating in her own labs for carelessly handling sensitive health data and test results.
But sometimes tech figures it out. It took years for 23andMe to breakthrough FDA regulations — it’s since more than tripled its business and moved into drug discovery.
And then there’s Oscar Health, which first made a mint on Obamacare and has since ventured into Medicare. Combined with Bright, the two health insurance startups have pulled in a whopping $3 billion so far.
It’s easy to shake our fists at fool-hardy founders hoping to cash in on an industry that cannot rely on the old motto “move fast and break things.” But it doesn’t have to be the code tech lives or dies by.
So which startups have the mojo to keep at it and rise to the top? Venture capitalists often get to see a lot before deciding to invest. So we asked a few of our favorite health VC’s to share their insights.
Phin Barnes – First Round Capital
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Careteam aims to unite patients and healthcare providers with a platform approach
How best to untangle the Gordian knot that is navigating your own healthcare? It’s a tricky question, and one that seems to have become only more complicated as technology improves, in many regards — systems don’t necessarily speak to one another, and it’s still hard for an ordinary patient without specialist knowledge to make sense of everything. Careteam is a Canadian startup hoping to address that, looking to replicate the kind of advances made possible by technology in industries like e-commerce and enterprise software.
Careteam co-founder and CEO Dr. Alexandra Greenhill has experienced the frustration of being a tech-savvy person in a world of healthcare that can seem technologically inept — both as a practicing GP and as someone who depends on the healthcare system as a patient and a relative of patients with more sophisticated medical needs.
“I spent more than 15 years innovating within the healthcare system,” Greenhill told me in an interview. “I computerized hospitals, helped doctors adopt electronic medical records and other types of innovation practices. And then for the last eight years, I’ve been in tech, trying to figure out how to build the kind of technology we need in health, and especially digital health.”
All that experience led Greenhill to the realization that while there were many companies building specific solutions for real, but relatively narrow problems, that didn’t reflect how most people experienced care. Greenhill and her team of three other co-founders (Jeremy P. Smith, Robert I. Atwell and Kevin Lysyk) had all had unfortunate, but eye-opening experiences with family members in need of treatment for major diseases.
“You step in and you discover that cancer care, palliative care, post-surgical care — there’s so many things that would have gone wrong if we didn’t have the expertise ourselves,” Greenhill said. “But in the meantime, you end up being sort of pulled into multiple directions and saying ‘this makes no sense.’ You know, I can purchase stuff online in my private life; I can use all kinds of tools in the business world, and yet it’s back to paper and voice in health, which matters most.”
Careteam CEO and founder Dr. Alexandra Greenhill
What Careteam provides is collaboration for care — true collaboration, designed to span patients, their doctors and other healthcare pros, their families and anyone who matters to them in the course of pursuing their care. It provides the ability to communicate instantly, build care plans that integrate all aspects of their tailored health plans, receive custom-configurable notifications and measure progress toward specific goals set by patient and healthcare providers.
Part of the reason this process has become opaque or difficult is precisely due to innovation: Greenhill takes issue with the prevailing narrative that the healthcare industry is somehow allergic to innovation.
“There’s this sort of perception that healthcare doesn’t innovate, but it’s also almost insulting to the healthcare system, because we have innovated — we save people from cancer, where we couldn’t,” she noted. “We cure HIV, in some cases, and we prevent it from being transmitted to unborn babies of mothers with full-blown AIDS and things that in my working lifetime were impossibilities; it was science fiction to help someone with HIV. And, and we’ve managed to do all of that, and it’s a success story. We’ve created complexity, we’ve created people who live with 12 conditions for many, many years and take complicated drug regiments.”
In addition to advances in treatment, Greenhill notes that she and her team couldn’t have build Careteam five years ago, because cloud storage wasn’t secure and everything had to be done on a site-specific instance, and that would’ve been cost-prohibitive to build. In other words, technology has been applied to, and vastly improved, healthcare overall, regardless of the general perception of the industry as an innovation laggard.
That’s why Greenhill’s startup doesn’t shy away from complexity — they embrace it. Careteam is designed not to try to normalize and standardize the varied and highly specialized landscape of healthcare solutions and providers through anything like a one-size-fits-all API. Instead, the company’s tech development is cleverly designed to be flexible when it comes to integrations.
“We collectively spent $1.9 billion in Canada, to try and digitize the healthcare system, create standards and create some exchange between data,” Greenhill said. “The NHS tried the same, big U.S. hospital systems have created their own little sort of islands, including Kaiser and Mayo and others. And the conclusion of all of that is standardization in healthcare just doesn’t seem to catch on.”
Careteam’s approach has been instead to integrate specific clinics, and let practitioners and patients derive benefits and help spur the adoption of the platform to their companion organizations and clinics. It’s a sort of rhizomatic approach that starts with a node central to a patient’s care and spreads through the healthcare professionals and members of the patient’s support network that the product helps. And integration is made possible without technical demands on the part of partners thanks to the work of CTO Lysyk, according to Greenhill.
The Vancouver-based startup is working with the Centre for Aging + Brain Health in Toronto, Ontario in a validation program announced last year, and also raised an initial round of funding in January led by BCF Ventures with participation from Right Side Capital, Globalive Capital, Atrium Ventures, and angels Barney Pell and Ajay Agarwal .
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Public health startup Cityblock raises $65M Series B
Redpoint Ventures has led a $65 million Series B in Cityblock, a healthcare company focused on providing improved care to low-income neighborhoods.
The business launched roughly 18 months ago out of Alphabet’s Sidewalk Labs, an urban innovation incubator known for projects like mobility data startup Coord, which itself raised a $5 million round in October.
“We’re a tech-enabled services company focused on caring for a population that has been traditionally overlooked by the innovation community and generally underserved across healthcare,” co-founder and chief executive officer Iyah Romm told TechCrunch. “We believe we can fundamentally redefine the way that health services are built across the country for low-income populations. These are populations that have never been prioritized.”
Romm has spent his entire career in the public health sector. Prior to joining Sidewalk Labs as an entrepreneur-in-residence in 2017, he spent one year as the chief transformation officer of the Commonwealth Care Alliance, a nonprofit medical care delivery organization.
Cityblock provides personalized medical and behavioral health and social services across a growing number of clinics on the East Coast. The company will use the investment to open additional clinics and continue the development of its core platform, Commons. The care delivery platform helps care workers collaborate and stay up to date on patients, with real-time hospital admission alerts to tools for tracking treatment progress.
Cityblock opened its first clinic, or “neighborhood hub,” in Brooklyn, New York after forging a partnership with EmblemHealth, a New York neighborhood health insurance business. They’ve since expanded to Connecticut via a partnership with ConnectiCare, a Connecticut insurance provider. Cityblock will open clinics in North Carolina later this year. Cityblock’s services come at no additional costs to members covered by partner insurance businesses.
The startup’s hope is to get these low-income demographics regular access to more affordable care. Preventative care, after all, is a whole lot cheaper than emergency room visits.
“People end up going to the ER when problems are really bad, for conditions that can be managed,” Redpoint partner and newly appointed Cityblock board member Elliot Geidt told TechCrunch. “There are 75 million people on Medicaid alone and a good portion of these people are living in the inner cities. It’s a problem that has a scope larger than most things that we see in the venture community. The big problem with this population is the existing healthcare system doesn’t work for them, it falls short on so many levels.”
New investors 8VC, Echo Health Ventures and StartUp Health also participated in the latest round, as did existing investors including Sidewalk Labs, Thrive Capital, Maverick Ventures, Town Hall Ventures and EmblemHealth.
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Lumity raises $19M to simplify employee health care choices
As companies get bigger and bigger, their needs are going to change — including, probably most importantly, their options for health care as their employee base expands and the costs of those plans start to balloon. But the end result is that employees could be presented with a confusing set of plans to pick from without a whole lot of guidance. There’s where Lumity comes in.… Read More
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