Behavioral health provider Two Chairs clinches $72M in equity, debt to expand hybrid model

Two Chairs, a hybrid behavioral health provider, has closed $72 million in a series C equity and debt financing round.

The round was led by Amplo with Fifth Down Capital, with participation from other investors. Bridge Bank provided the debt financing. While details of the round were not disclosed, executives said it was majority equity. The latest round brings the company’s total capital raised to $103 million. 

Two Chairs has grown eight-fold in the last three years and currently has more than 500 clinicians on staff, most of whom are full time, executives said. The company operates in three states—California, Washington and Florida—with plans to expand to new markets. It will also use the latest capital to beef up its technology.

“Two Chairs epitomizes quality in behavioral health, taking an extraordinarily thoughtful approach, and you can see it in their outcomes data,” Sheel Tyle, founder and CEO of Amplo, said in a press release. “Two Chairs has been growing quickly—in all the right ways and for all the right reasons.”

Among the company’s main differentiators is a focus on matchmaking and measurement-based care, founder and CEO Alex Katz told Fierce Healthcare. Studies show that the relationship between a therapist and their client is the most important factor in determining good mental health outcomes.

To that end, Two Chairs has developed a proprietary 300-variable algorithm that aids in the patient-provider matching process. The vast majority (97%) of Two Chairs clients say their alliance with their therapist is strong, according to the company. 

When it comes to measurement-based care, an evidence-based and underutilized way to track outcomes in behavioral health, Two Chairs leverages technology to provide real-time insights into a client’s well-being. It collects a variety of data, 94% of the time from patients before every appointment. That includes symptom measures, a therapeutic alliance scale and overall quality of life. 

“It’s rare because most people don’t know how to do it, … we have the time and space to go into a lot more depth,” Katz said.

This is then visualized for the therapist and enables better treatment and strengthens the therapeutic alliance, Katz explained. “That data is only as good as the therapist is utilizing it in the room with the patient,” he added. 

Two Chairs patients range in age and conditions. One of the main benefits to having many full-time staff is the ability to see patients with more complex or higher acuity needs, according to Katz. Clinicians can consult on harder cases with their team and receive coaching from their clinical manager. Having a crisis protocol in place supports their work with a complex population. Two Chairs also collaborates with primary care providers and psychiatrists when referrals are needed.

Two Chairs currently works with Aetna nationally and Kaiser Permanente in Washington and Northern California, serving some Medicaid and Medicare patients. Additional partnerships will be finalized later this year. 

The company says 90% of its patients make it to their fourth session, which it says is significantly higher than the industry average of 36%. 

“Delivering high quality care for patients and a great experience for clinicians, those are the two things that matter most in the long run,” Katz said.