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Mental wellness platform Lyra Health is raising up to $175M at a $2.25B valuation
The coronavirus pandemic has underscored, and often exacerbated, the mental health crisis that exists across the world. Even the spread of remote work is part of the problem: As everyone stays at home, the lack of interaction and watercooler chat has left employees without in-person interaction.
The need for a solution has helped tech-powered mental health solutions raise funding to meet increased demand. In the latest development, it emerged that Lyra Health, a platform that focuses on providing workforces with mental health care, has filed paperwork to raise a $175 million Series E at a $2.25 billion valuation.
The paperwork was uncovered by Prime Unicorn Index. While it is not clear whether the company has closed the round, filings in Delaware usually appear after part or all of the funding has been secured. Prime Unicorn Index notes that the terms surrounding this Series E round include a “pari passu liquidation preference with all other preferred, and conventional convertible, meaning they will not participate with common stock if there are remaining proceeds.” It also noted that Lyra Health’s most recent price per share is $27.47, an up round from the Series D, which priced shares at $14.21.
We are reaching out to the company and investors for a response to the filing. One investor noted that the round has not closed yet.
Past backers of the company include Adams Street Partners, Tenaya Capital, Meritech Capital Partners, IVP and Greylock.
We seem to be in a period of rapid growth rounds getting raised in quick succession for the most promising startups. As with Discord — which confirmed a $100 million round just six months after raising $100 million — Lyra Health also recently raised funding — specifically a $110 million Series D that catapulted it above a $1 billion valuation.
That effectively means the startup doubled its valuation in a handful of months, suggesting rapid growth or key validation. As reported by Forbes, Lyra Health was set to bring in around $100 million in revenue by the end of the year at the time of its prior fundraise.
There have been a number of categories of technology that have seen a bump of usage and interest during this coronavirus pandemic, and sadly — or perhaps usefully, depending on how you look at it — mental health and wellness startups, aimed at helping our well-being in this trying time, have been one of them. Just last week, the meditation app Calm raised $75 million at a $2 billion valuation.
Burlingame, California-based Lyra Health wants to live in offices everywhere. The company helps employers give their employees a suite of safe and confidential tools to support their mental health needs. This is a tricky space to play in, considering that mental health can still feel taboo in workplaces and employees might feel uncomfortable turning to their employers for support. Still, in a world where in-office perks are no longer available, mental health might be a key investment to help startup retention.
Once an employee joins Lyra, the company creates a set of recommendations for the now-patient based on a survey. Lyra Health then can connect patients to its network of thousands of therapists for appointments, consultations and check-ins. The flywheel continues.
During the pandemic, Lyra Health has brought on 80,000 new users, to a total of 1.5 million users last reported.
Tech-enabled mental health care has found tailwinds as the coronavirus pandemic leads to a surge of telehealth, as in-person doctor’s appointments could leave patients at risk. Indeed, Lyra Health started Lyra Blended Care, which pairs video therapy with online lessons and exercises rooted in cognitive behavioral therapy.
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Lee Fixel is already raising a massive second fund
On Friday, former Tiger Global Management investor Lee Fixel registered plans for the second fund of his new investment firm, Addition, just four months after closing the first. According to a report on Friday by the Financial Times, the outfit spent last week finalizing the fundraising for the $1.4 billion fund, which Addition reportedly doesn’t plan to begin investing until next year.
But a source close to the firm now says the capital has not been raised. That’s perhaps good news for investors who were shut out of Addition’s $1.3 billion debut fund and who might be hoping to write a check this time around.
The mere fact that Fixel is back in the market already has tongues wagging about the dealmaker, one whose reluctance to talk on the record with media outlets seems only to add to his mystique. Forbes published a lengthy piece about Fixel this summer, in which Fixel seems to have provided just one public statement, confirming the close of Addition’s first fund and adding little else. “We are excited to partner with visionary entrepreneurs, and with our 15-year fund duration, we have the patience to support our portfolio companies on their journey to build impactful and enduring businesses,” it read.
According to Forbes, that first fund — which Fixel is actively putting to work right now — intends to invest one-third of its capital in early-stage startups and two-thirds in growth-stage opportunities.
Whether that includes some of the special purpose acquisition vehicles, or SPACs, that are coming together right and left, isn’t yet known, though one imagines these might appeal to Fixel, who has long seemed to be at the forefront of new trends impacting growth-stage companies in particular. (A growing number of SPACs is right now looking to transform into public companies some of the many hundreds of richly valued private companies in the world.)
Clearer is that Addition is wasting little time in writing some big checks. Among its announced deals is Inshorts, a seven-year-old, New Delhi, India-based popular news aggregation app that last week unveiled $35 million new funding led by Fixel.
The deal represents Addition’s first India-based bet, even while Fixel knows both the country and the startup well. He previously invested in Inshorts on behalf of Tiger; he’s also credited for snatching up a big stake in Flipkart on behalf of Tiger, a move that reportedly produced $3.5 billion in profits when Flipkart sold to Walmart.
Addition also led a $200 million round last month in Snyk, a five-year-old, London-based startup that helps companies securely use open-source code. The round valued the company at $2.6 billion — more than twice the valuation it was assigned when it raised its previous round 10 months ago.
And in August, Addition led a $110 million Series D round for Lyra Health, a five-year-old, Burlingame, California-based provider of mental health care benefits for employers that was founded by former Facebook CFO David Ebersman.
A smaller check went to Temporal, a year-old, Seattle-based startup that is building an open-source, stateful microservices orchestration platform. Last week, the company announced $18.75 million in Series A funding led by Sequoia Capital, but Addition also joined the round, having been an earlier investor in the company.
According to PitchBook data, Addition has made at least 17 investments altogether.
Fixel — whose bets while at Tiger include Peloton and Spotify — isn’t running Addition single-handedly, though according to Forbes, he is the single “key man” around which the firm revolves, as well as the biggest investor in Addition’s first fund.
He has also brought aboard at least three investment principals from Wall Street and a head of data science who worked formerly for Uber (per Forbes). Ward Breeze, a longtime attorney who worked formerly in the emerging companies practice of Gunderson Dettmer, is also working with Fixel at Addition.
(Correction: An earlier version of this story reported that Fixel’s newest fund was already raised, per the FT.)
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Lucid Lane has developed a service to get patients off of pain meds and avoid addiction
Four years ago, Adnan Asar, the founder of the new addiction prevention service Lucid Lane, was enjoying a successful career working as the founding chief technology officer at Livongo Health. It was the serial senior tech executive’s most recent job after a long stint at Shutterfly and he was shepherding the company through the development of its suite of hardware and software for the management of chronic conditions.
But when Asar’s wife was diagnosed with non-Hodgkin’s Lymphoma, he stepped away from the technology world to be with his family while she underwent treatment.
He did not know at the time that the decision would set him on the path to founding Lucid Lane. The company’s mission is to help give patients who have been prescribed medications to address pain and anxiety ways to wean themselves off those drugs and avoid addiction — and its purpose is born from the struggle Asar witnessed as his wife wrestled with how to stop taking the medication she was prescribed during her illness.
Asar’s wife isn’t alone. In 2018, there were roughly 168.2 million prescriptions for opioids written in the United States, according to data from the Centers for Disease Control and Prevention. Lucid Lane estimates that 50 million people are prescribed opioids and another 13 million are prescribed benzodiazepines each year either after surgery or in conjunction with cancer treatments — all without a plan for how to manage or taper the use of these highly addictive medications.
For Asar’s wife, it was the benzodiazepine prescribed as part of her cancer treatment that became an issue. “She was hit by very severe withdrawal symptoms and we didn’t know what was going on,” Asar said. When they consulted her physician he gave the couple two options — quitting cold turkey or remaining on the medication.
“My wife decided to go cold turkey,” Asar said. “It was really debilitating for the whole family.”
It took nine months of therapy and regular consultations with psychiatrists to help with tailoring medication dosages and tapering to get her off of the medication, said Asar. And that experience led to the launch of Lucid Lane.
“Our goal is to prevent and control medication and substance dependence,” Asar said.
The company’s telehealth solution is built on a proprietary treatment protocol meant to provide continuous daily support and interventions, along with proactive monitoring of a personalized treatment plan — all on an ongoing basis, said Asar.
And the COVID-19 pandemic is only accelerating the need for telehealth services. “COVID-19 has made telehealth a mandatory service instead of a discretionary service,” said Asar. “There’s a surge in anxiety, depression, substance use and medication use. We’re seeing a surge of patients who are reaching out to us.”
Asar sees Lucid Lane’s competitors as companies like Lyra Health and Ginger, or point solutions building digital diagnostics to detect anxiety and depression. But unlike some companies that are launching to treat addiction or addictive behaviors, Asar sees his startup as preventing dependency and addiction.
“A lot of people are sliding into these addictions through something that happens at the doctor’s office,” said Asar. ” Our solution does not prescribe any of these medications.”
The company is working on clinical studies that are set to start at the Palo Alto VA hospital, and has raised $4 million in seed funding from investors including Battery Ventures and AME Cloud Ventures, the investment firm founded by Jerry Yang.
“We see great potential for Lucid Lane, as it has developed a scalable solution to one of the biggest problems facing society today,” said Battery general partner Dharmesh Thakker, in a statement. “Telehealth solutions have emerged as highly capable of addressing complex problems, and Lucid Lane has embraced remote care from its beginning. Its design enables care anytime, anywhere for patients in their moment of need. This can make a tremendous difference in the battle between recovery and relapse. We believe that it will help millions of people lead better lives.”
Joining Asar in the development of the company and its healthcare protocols are a seasoned team of health professionals, including Dr. Ahmed Zaafran, a board certified anesthesiologist at Santa Clara Valley Medical Center and assistant professor of anesthesiology (affiliated) at Stanford University School of Medicine; and advisors like Dr. Vanila Singh, who was also previously chairperson of the HHS Task Force in conjunction with the DOD and the VA to address the opioid drug crisis; Dr. Carin Hagberg, the chair of anesthesiology, perioperative and pain medicine of MD Anderson Cancer Center; and Sherif Zaafran, the president of the Texas Medical Board and chair of multiple national committees on pain management, including the subcommittee Taskforce on Pain Management Services for HHS, as well as the department’s Pain Clinical Pathways Committee.
“Lucid Lane provides a patient-centered solution that allows for the best clinical outcomes for patients after surgery and those bravely finishing chemotherapy,” said Dr. Singh, in a statement. “For the many patients who require short-term opioids and benzodiazepine medications, Lucid Lane’s treatment can limit the risk of prolonged dependence of these medications while also ensuring effective pain control with a resulting improved quality of life and functioning.”
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Spring Health raises $6M to help employees get access to personalized mental health treatment
In recent months, we’ve seen more and more funding flowing into tools for mental wellness — whether that’s AI-driven tools to help patients find help to meditation apps — and it seems like that trend is starting to pick up even more steam as smaller companies are grabbing the attention of investors.
There’s another one picking up funding today in Spring Health, a platform for smaller companies to help their employees get more access to mental health treatment. The startup looks to give employers a simple, effective way to start offering that treatment for their employees in the form of personalized mental wellness plans. The employees get access to confidential plans in addition to access to a network and ways to get in touch with a therapist or psychiatrist as quickly as possible. The company said it has raised an additional $6 million in funding led by Rethink Impact, with Work-Bench, BBG Ventures, and The Partnership Fund for New York City joining the round. RRE Ventures and the William K. Warren Foundation also participated.
“…I realized that mental health care is largely a guessing game: you use trial-and-error to find a compatible therapist, and you use trial-and-error to find the right treatment regimen, whether that’s a specific cocktail of medications or a specific type of psychotherapy,” CEO and co-founder April Koh said. “Everything around us is personalized these days – like shopping on Amazon, search results on Google, and restaurant recommendations on Yelp – but you can’t get personalized recommendations for your mental health care. I wanted to build a platform that connects you with the right care for you from the very beginning. So I partnered with leading expert on personalized psychiatry, Dr. Adam Chekroud our Chief Scientist, and my friend Abhishek Chandra, our CTO, to start Spring Health.”
The startup bills itself as an online mental health clinic that offers recommendations for employees, such as treatment options or tweaks to their daily routines (like exercise regimens). Like other machine learning-driven platforms, Spring Health puts a questionnaire in front of the end employee that adapts to the responses they are giving and then generates a wellness plan for that specific individual. As more and more patients get on the service, it gets more data, and can improve those recommendations over time. Those patients are then matched with clinicians and licensed medical health professionals from the company’s network.
“We found that employers were asking for it,” Koh said. “As a company we started off by selling an AI-enabled clinical decision support tool to health systems to empower their doctors to make data-driven decisions. While selling that tool to one big health system, word reached their benefits department, and they reached out to us and told us they need something in benefits to deal with mental health needs of their employee base. When that happened, we decided to completely focus on selling a “full-stack” mental health solution to employers for their employees. Instead of selling a tool to doctors, we decided we would create our own network of best-in-class mental health providers who would use our tools to deliver the best mental health care possible.”
However, Spring Health isn’t the only startup looking to create an intelligent matching system for employees seeking mental health. Lyra Health, another tool to help employees securely and confidentially begin the process of getting mental health treatment, raised $45 million in May this year. But Spring Health and Lyra Health are both part of a wave of startups looking to create ways for employees to more efficiently seek care powered by machine learning and capitalizing on the cost and difficulty of those tools dropping dramatically.
And it’s not the only service in the mental wellness category also picking up traction, with meditation app Calm raising $27 million at a $250 million valuation. Employers naturally have a stake in the health of their employees, and as all these apps look to make getting mental health treatment or improving mental wellness easier — and less of a taboo — the hope is they’ll continue to lower the barrier to entry, both from the actual product inertia and getting people comfortable with seeking help in the first place.
“I think VC’s are realizing there’s a huge opportunity to disrupt mental health care and make it accessible, convenient and affordable. But from our perspective, the problem with the space is that there is a lot of unvetted, non-evidence-based technology. There’s a ton of vaporware surrounding AI, big data, and machine-learning, especially in mental health care. We want to set a higher standard in mental healthcare that is based on evidence and clinical validation. Unlike most mental health care solutions on the market, we have multiple peer-reviewed publications in top medical journals like JAMA, describing and substantiating our technology. We know that our personalized recommendations and our Care Navigation approach are evidence-based and proven to work.
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Lyra Health raises $45M to create a smart network for treating mental health problems
Treating issues with mental health can be a daunting and very sensitive task for anyone that is suffering from any kind of mental illness — but the problem for many is that a lot of patients just don’t know where to start, according to David Ebersman.
That’s where Lyra Health hopes to help. The service works with employers to offer a tool to their employees that helps them securely and confidentially begin to understand what kind of treatment they need to seek if they feel like they are suffering from any mental health problems. Employers naturally have a stake in this as they want their employees to stay health, but the goal is to offer a sort of safe space where users can benefit from years of growth in pattern matching and data to help them figure out where to start. The company said it has raised $45 million in a new financing round including Tenaya Capital, Glynn Capital Partners, Crown Ventures, and Casdin Capital. Existing investors that include Greylock Partners, Venrock, and Providence Ventures also participated in the funding round.
“We felt it was important to build an offering that would be helpful to all of the people who work at these companies and are suffering from a mental health condition like depression, or anxiety, or substance abuse,” Ebersman said. “A lot of the people we want to help don’t know where they’re starting. Trying to build and market something narrowly to a subset of the audience requires the audience to know they’re in that subset. Trying to build something more welcoming and engaging for a broader set of conditions felt to us to be a realistic response to the fact that not everyone can self identify. Fortunately technology really helps us with this — we can build a secure and confidential place where an employee can go and answer some questions that relate to their symptoms, severity, treatment preferences and use technology to match them for the right care.”
Lyra Health first starts off working with employers to figure out a plan to communicate to employees that the tool actually exists. But that’s one of the biggest challenges, as mental health issues — like anxiety or depression — can be very sensitive subjects for employees. Lyra Health has to work with employers to convince to give them confidence to explore it as a safe and confidential place, where they can put in information about some of their symptoms while feeling like that information is going to be locked down.
From there, Lyra takes a close look at that data and then build a set of recommendations for the patients based on what they think some of their symptoms correlate to. Lyra Health has a network of around 2,500 therapists, most of which don’t participate in traditional health plans, Ebersman said. Lyra Health then connects patients with those therapists, and they can schedule the appointment online and get started right away. Lyra Health then periodically checks in with the patients to see how they are doing and ensuring they feel like they are getting better — another data point that helps the company figure out if its recommendations are working.
“We really believed that the experience that we give to patients today could be dramatically improved,” Ebersman said. “This is part of the healthcare system that’s really hard to understand, it’s hard to navigate, and there are a bunch of different types of solutions for a variety of different conditions. We felt that trying to build a comprehensive solution that would make it easy for clients to find the care that was matched correctly to their needs and preferences was a tech problem we could start grappling right away.”
Ebersman previously oversaw the initial public offering of Facebook as its CFO, but the challenge Lyra Health entails is one that may be just as complex. Not only does the company have to establish and maintain that network of high-quality doctors and therapists, it also has to ensure that it builds and maintains a robust data set that ensures that its recommendations are actually on point — and get better over time. If it ends up as a bad product, employees won’t use it, and the recommendations can’t improve at any point. And amid all of this, the experience has to feel like a good and approachable one, even though it’s partially tackled through machine learning.
“I think we are able to successfully communicate to employees what Lyra does in a way that doesn’t seem intimidating or stigmatized,” Ebersman said. “I think the experience of exploring what your care options are using technology is a little easier for people. I think there are places where technology plays a critical role in this journey. One is creating a safe environment where you can dip your toe in the water. I also think a technology based experience can give you confidence that the best care for what you need is out there. I do believe that for most people in the care journey, interacting with a human who is warm and who you can relate to, and who has skills to help you, improve is an important piece. But if you think comprehensively from the beginning to the end of someone’s care journey, there’s a critical set of roles technology can play to ensure that more people engage and have a better experience.”
Ebersman hopes Lyra Health is riding a wave of increased awareness and attention for mental health. That could encompass anything from apps like Lyra Health to companies that are focusing on wellness like meditation apps like Calm (which is reportedly valued over $250 million). All of these companies have been able to raise pretty significant rounds of financing, but it also means that there will be a lot of activity — and a bit of a race to get adoption and build up the kind of robust data sets you need to have a formal defensibility in the marketplace. There are other approaches to mental health like Huddle, but the trick will be figuring out how to get people on board and spin up that flywheel that will make the experience better and better.
” Many people with mental health conditions don’t ever engage with the system, or if they do, are quickly intimidated with how confusing and frustrating it can be,” he said. “We believe if we build a simple and warm tech-based experience that’s confidential and secure, we can get more people engaged with the mental health system. Our engagements are about seven times higher than the companies were seeing with the solutions they had before they launched Lyra.”
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