Employers are facing an urgent mental health crisis among their workforces as the COVID-19 pandemic has exacerbated stress, anxiety and burnout.
But it's not just employees who need support. The pandemic has also driven demand for mental health services for caregivers and children, with more than 25% of high school students reporting worsening emotional and cognitive health in the pandemic.
Spring Health, provider of a mental health benefits platform for employers, aims to take the company global and expand its solution to serve employees' entire families, boosted by $190 million in fresh capital. The funding round propelled the company's valuation to $2 billion, according to executives.
The company has raised $300 million to date.
The round was led by health investor Kinnevik; insurer Guardian Life joined as a new investor, while existing investors—including Tiger Global, Northzone, RRE Ventures, Rethink Impact, Work-Bench, William K Warren Foundation, SemperVirens, Able Partners and True Capital Ventures—also participated.
The series C funding round catapults the company's valuation to $2 billion, making it one of the latest digital mental health startups to reach "unicorn" status, or a valuation of at least $1 billion. Modern Health, Lyra Health and Ginger, soon to be merged with Headspace, are also in this camp of startups.
Of note, at age 29, April Koh, Spring Health's co-founder and CEO, is now the youngest woman to run a unicorn.
Spring Health's business has been propelled by approximately six times revenue growth over the past year, company executives said.
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The startup offers what it calls "precision mental healthcare" that matches each employee to the most effective care for them. The solution includes mindfulness and meditation, care navigation, coaching, therapy and medication management. A scientific study recently revealed that Spring Health is the most effective and efficient employer-facing mental health solution available today, delivering best-in-class outcomes in half the time as others in the industry, the company reports.
More than 2 million employees worldwide currently have access to Spring Health.
The company offers resources for both employees and their family members, including relationship counseling, pediatric mental health care, parental coaching, self-guided exercises for parents and adult therapy for individuals.
The cash infusion will accelerate the company's efforts to integrate these existing offerings into the first cohesive mental health experience for families, where both individuals and relationships within families can be supported through one central solution, Adam Chekroud, Ph.D., co-founder and president of Spring Health, told Fierce Healthcare.
"We have some customers piloting our services globally and we want to accelerate this global expansion and continue to extend high-quality, comprehensive resources to employees in other countries," he said.
The world is facing an "unprecedented global mental health crisis," and that has fueled demand for virtual behavioral health services, Chekroud said.
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"There are a lot of platforms out there because so many people need help. Innovation in the mental health space has focused on providing faster access, but access to something that doesn’t work for you doesn’t help, you're just accelerating access to a broken system," he said.
Spring Health's solution helps eliminate trial and error by providing a more personalized and effective mental health experience. Using machine learning models, the company's solution assesses an individual's needs and care navigators guide the individual to the right care, whether it's coaching, meditation, therapy or medication.
Five years ago, Koh teamed up with Chekroud, who, as a Ph.D. candidate at Yale University, published peer-reviewed research on the ways machine learning could help match patients to the best care providers for their needs.
"The core technology that I developed pinpoints what works for you specifically to get you into effective treatment faster," Chekroud said.
Chekroud, Koh and Abhishek Chandra launched the startup in 2016. Spring Health now works with more than 150 companies, from startups to multinational Fortune 500 corporations.
The mental health market is booming, and investors are pouring major cash into the sector. Globally, mental health startups raised a record high of $2 billion in equity funding in 2020, according to CB Insights.
But having so many point solutions on the market can cause friction for employers who are interested in one integrated technology solution, according to Chekroud.
"The world's biggest employers are facing so many mental health challenges right now: employees dealing with burnout, drug or alcohol abuse, disruption to childcare, struggling to find access to care for employees or their family members, and high employee turnover. When you face any one of these issues, the problems can impact the whole family. We realized we have a unique opportunity to bring all of these pieces together into a cohesive solution," he said in a statement.
In addition to expanding its footprint among employers, Spring Health plans to ramp up its partnerships with health plans, starting with investor Guardian Life, a life, disability and employee benefits provider.
"Providing mental health resources and wellbeing support is a top priority for Guardian and an urgent need for our customers," said Michael Prestileo, head of strategy, product and underwriting for Guardian Group Benefits, in a statement. "We are excited to partner with Spring Health, an innovative leader in this space, to bring the industry's first integrated solution to market."
Spring Health also may be eyeing acquisitions to build out its capabilities. "We would explore companies that we could acquire as part of our integrated strategy. There are lots of point solutions and some do a really good job on a specific problem. If those solutions fit into our integrated offering, it makes sense to consider acquiring them," Chekroud said.
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The digital health market is experiencing an IPO boom as high valuations and investor interest propel companies to go public to access capital-raising opportunities.
Koh told Forbes in an interview that her near-term goal is an IPO.
Chekroud said Spring Health is laser-focused on building a substantial, standalone mental health company. "We have built a great business and we're growing quickly," he said.
As part of the financing, Kinnevik's Christian Scherrer will be joining Spring Health's board of directors.
The financing round, which included both equity and debt, included participation from existing investors Tiger Global, Northzone, RRE Ventures, Rethink Impact, Work-Bench, the William K. Warren Foundation, SemperVirens, Able Partners and True Capital Ventures.