There's a new reimbursement pathway for VR therapy. The health tech company behind it just raised $10M

Floreo, maker of VR behavioral therapy content, has clinched $10 million in a funding round. 

The series A funding round was led by Tenfore Holdings with participation from the Felton Group, the Autism Impact Fund and the Disability Opportunity Fund. In a statement, Tenfore Holdings said its investment in Floreo is driven by its belief in the platform and team.

“The company is serving a large and growing market through a highly differentiated, scalable, and accessible technology model,” Tenfore Holdings’ managing partner Dan Levine said in the announcement. 

Launched in 2016, the company develops clinically designed VR lessons that help teach life skills aimed at children with autism and other neurodevelopmental disorders. Its mission, led by founder and CEO Vijay Ravindran, is to help every child reach their full potential; hence the name Floreo, which comes from the Latin root for the word "flourish."

Floreo has been deployed by more than 100 providers nationwide and was used in 17,000 therapy lessons last year. It currently has Medicaid approval in five states. 

The experiences are accessed with an iPhone and VR headset and then paired with an iPad used by a supervising adult or therapist. The iPad, which can be used remotely, offers a live view of what the learner is seeing and enables customization of scenarios in lessons. The platform also records key data that can help inform a treatment plan. Lessons are designed by Floreo's clinical staff, including a licensed speech-language pathologist and neurodevelopmental pediatrician, and can range from basic skills like eye contact to more serious ones like interacting with police safely. 

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The funding announcement comes on the heels of the approval of a new CPT code for the use of VR in therapy by the American Medical Association—an idea Floreo pitched. It is the first VR therapy code in the behavioral health space. 

Floreo is also partnering with one of Ohio-based payer CareSource’s providers, Arkansas Support Network (ASN), to bring VR interventions to individuals with disabilities. The lessons will be overseen by a licensed clinical social worker from ASN, starting with a life assessment and individualized goal-setting.

"At ASN we are continually looking for innovative approaches to supporting individuals with disabilities to live rewarding and meaningful lives in their communities,” Syard Evans, CEO of ASN, said in an announcement. VR offers promising opportunities to enhance skills to that end, she added. 

VR headset with Floreo logo

As an early engineer at Amazon Prime and later as chief digital officer of The Washington Post, Ravindran had no prior healthcare experience when starting Floreo. The idea came when he watched his son, who is on the autism spectrum, try a VR headset and immediately begin to pretend play for one of the first times.

“It ended up being this 'lightbulb' moment,” Ravindran said. 

The company partnered with Children’s Hospital of Philadelphia early on to research the product and again on its fast-track grants from the National Institutes of Health, which include several randomized control trials. The goal is to demonstrate safety and efficacy, with early results showing 98% of children complete their lessons and most report the experience as valuable. 

Floreo eventually plans to seek FDA clearance, Ravindran said, hoping to signify the scientific rigor behind the product and to help gain additional reimbursement pathways. 

While Floreo is a healthcare company first and foremost, Ravindran said, he sees its potential in adjacent fields; for example, Floreo works with the Tennessee Department of Intellectual Disability on content related to job skills. 

Floreo will be available for Meta Quest, formerly Oculus, by the end of the year.