Behavioral care startup SonderMind has reached a valuation "well north" of $1 billion with the close of a new $150 million Series C funding round.
The raise, co-led by Drive Capital and Premji Invest, represents a stark jump over the $27 million series B announced by the startup just over a year ago.
The Denver-based therapist matchmaking platform said it was being purposefully conservative with its fundraising at the time but now has the pieces in place to pursue an expansion from 10 active states to all 50.
“We have historically raised meaningfully less than the amount that capital partners wanted to invest,” Mark Frank, CEO and co-founder, told Fierce Healthcare in an email statement.
“We now believe that our playbooks are pretty well-baked and are ready for extremely rapid scaling into the definitive market leader. Additionally, the outstanding growth in existing markets and the stunning clinical results were extremely attractive to investors. Finally, revenue grew over 400% since our Series B and we've been incredibly capital efficient,” he said.
SonderMind’s tech platform asks consumers to complete a short questionnaire regarding their care needs, insurance and payment info before connecting them to a licensed mental healthcare professional. These connections are often made with one or two days, according to the company, and support in-person as well as online video appointments.
Behind the scenes, the company works directly with its vetted therapists and other psychiatric providers to determine the types of patients they would like to treat. The startup gives professionals who’ve joined its network access to the tools they need to conduct telehealth visits while handling their billing and payer interactions.
Frank said that recent increases in demand and utilization have been in line with the company’s geographic expansions, “but not much change related directly to COVID.” Having now provided mental health access to more than 73 million people, he noted that the company has a greater body of evidence suggesting that its services are improving outcomes among users.
“SonderMind stood out to us as the market leader because of their clear approach to connecting individuals with therapists that meet their needs and take their insurance, all while producing clinically-verifiable outcomes for users,” Molly Bonakdarpour, a partner at Drive Capital, former director at Livongo and now a SonderMind board member, said in a statement. “It is a win for all stakeholders: patients, therapists and health plans. I’m so excited to work with the team to bring this approach national.”
Beyond scaling up the business, Frank said that the new funds would also support investments into “technology, data and tools to support our therapists in building their practice and ensuring the best clinical outcomes.”
Joining Drive Capital and Premji Invest in the round were General Catalyst, Partners Group, Smash Ventures, Kickstart, F-Prime Capital, Founders Circle Capital, Zoma Foundation and FCA Venture Partners. This round now brings the startup’s lifetime capital raise to $183 million.
The behavioral health tech space was growing prior to the pandemic but has only gotten hotter as investors open their pockets and established virtual care platforms continue to expand their offerings. The most recent example of the latter came just this week as Ro, a consumer-facing digital health and wellness company launched a virtual mental health service combining video and asynchronous visits for generalized anxiety disorder and major depressive disorder.