Startup Alma built a tech platform that helps mental health practitioners sustain their practices and gets more therapists into insurance networks.
Amid skyrocketing demand for therapists and mental health services, the company nabbed $130 million from backers including private equity firm Thoma Bravo, Cigna's venture arm and Optum Ventures. Existing investors Insight Partners, Tusk Venture Partners, Primary Venture Partners and Sound Ventures also participated in the series D round, bringing the company’s total funding to over $220 million.
The deal values Alma at about $800 million, according to a person familiar with the situation, The Washington Post reported.
Alma is a membership-based network that helps independent mental health care providers accept insurance and build private practices.
In the past year, Alma scaled its services to offer in-network mental health care in all 50 U.S. states, according to Alma founder and CEO Harry Ritter, M.D.
The shortage of mental health professionals has been going on for years. The COVID-19 pandemic has exacerbated mental health conditions like stress, anxiety and depression, and the demand for therapists has soared.
But many mental health professionals don't accept insurance due to the administrative burdens of dealing with health plans.
A survey from the California Association of Marriage and Family Therapists estimates 42% of therapists in the state don’t accept insurance. Office visits to mental health providers are more than five times more likely to be out of network than are visits to primary care providers, according to a 2019 report from consulting firm Milliman.
Alma helps providers meet the rising demand for mental health care by giving them the support and infrastructure they need to accept insurance and run their small businesses, according to executives. When providers join Alma, they gain access to insurance support, teletherapy software, automated billing and scheduling tools and a network of clinicians that have access to education and training.
Over the past 12 months, Alma scaled its network over three times to 8,000 mental health providers that are licensed to practice in all 50 states.
"That includes non-prescribers like psychotherapists and psychologists as well as prescribers like psychiatrists and nurse practitioners and we help them run their business. It's everything from helping them find the right clients for their practice through our directory or other client matching services to all the technology they need, including scheduling, billing, note taking assessments as well as a big emphasis on training and education and community," Ritter said in an interview.
"The last part of what we do is we make it easy for these providers to accept insurance, so we facilitate the contracting, credentialing and claims processing for national and regional players that we work with," he said.
A physician by training, Ritter launched Alma in 2017 with a provider-first approach to mental health care. He previously worked at Oscar as medical director and vice president of care delivery.
After the death of his father, Ritter saw a therapist to help process his grief.
"It changed my life and was a hugely impactful part of my own experience. It opened my eyes about what it means to be healthy and well and that you can't think about primary care without mental health," he said.
While at Oscar, Ritter says he became aware of the ongoing demand and need for mental health services.
"I wanted to be part of building a solution to that problem. I wanted to do it in a way as a physician that was really oriented around the provider and trying to create a platform and an experience to help providers succeed," he said. "We have a strongly held belief at Alma that when providers have the support that they need, the system gets better for everyone."
The rapid shift to virtual care during the pandemic in the past two years changed Alma's approach to how it supports mental health providers, Ritter said.
"We always had this core idea that our job was to help providers succeed. One way you did that back in 2018, when we started the company, was providing physical office space because 95% of care, at least on our platform, was happening in person. We used to actually operate these sort of WeWork-style co-practicing spaces for providers via two locations in New York," he said.
In 2020, the company quickly built out virtual care capabilities. Pre-pandemic, 95% of providers in Alma’s network were practicing in person. In the past two years, there has been a major shift.
"That's been a fascinating part of how the landscapes really changed. Today, 90% of sessions supported by Alma are virtual," Ritter added.
Alma provides a hybrid model with providers on its network in 27 states offering in-person care.
"I think it's had a positive impact on equitable access to care. It's now suddenly allowed providers that offer care for a particular population or specialty to reach patients anywhere that they're licensed and that's really powerful," he noted. "A patient in a rural environment or in part of the state with fewer of a particular kind of clinician suddenly now has a lot more folks that they can reach out to to get care."
Alma plans to use the new funding to continue expanding the reach of its platform to new providers. The company also will invest in its platform to build out more billing and practice tools.
"With this investment in Alma and their growing network, we can accelerate how we drive access to diverse in-network therapists, allowing our customers to access care when and where they need it most. We believe that Alma is well positioned to make this a reality and look forward to supporting their efforts to expand access to care with this innovative model," said Tom Richards, global leader for strategy and business development at Cigna, in a press release.
The company's ability to match patients to providers helps speed access to care, according to executives. Ninety percent of people who come to Alma looking for mental health care can get matched with a therapist within a week.
The company also is committed to nurturing a diverse community of clinicians that is able to serve clients across the country. Almost 40% of providers in Alma’s network self-identify as Black, Hispanic/Latin, or Asian, and they speak over 40 languages. Roughly 10% of providers in Alma's network identify as LGBTQ.
Manuela Mage, a licensed clinical social worker who is in Alma's network, said, "Whenever I have a question or an issue I’m wrestling with, I know that I can go to Alma’s community hub and get advice and diverse perspectives from therapists that have dealt with the same issues. It’s also a relief to know that Alma handles the insurance billing and claims management so I can focus on helping my clients navigate challenging moments in their lives."
Alma also announced recent key hires. Elisabeth Morray, Ph.D., a licensed psychologist and the former director of telehealth at LifeStance Health, joined Alma’s leadership team as the vice president of clinical operations. Alma also hired Erik Lumer, the former chief product officer at Maven Clinic, as its chief product officer. Chiddy Onyia, the former general counsel and chief compliance officer at Quartet Health, has joined Alma as general counsel.
The company is not the only startup working to tackle these issues in the mental health space. New York City-based Headway launched to address accessibility and affordability issues for mental health care services. Headway developed a full-stack therapy marketplace that deals with the messiness of insurance. CEO and co-founder Andrew Adams said the company is building out a first-of-its-kind behavioral health network of therapists who accept insurance.
Headway has raised $100 million to date, according to Crunchbase. A $70 million funding round last year propelled the company to a $750 million valuation, according to the executives.