New York City-based Headway built a platform to make it both easier for patients to find a therapist and easier for therapists to accept insurance.
The startup has seen rapid growth, now operating in all 50 states and has 34,000 in-network mental health care providers affiliated with more than 40 insurance plans. That's up from 26,000 providers and 19 in-network insurance plans just last October when the company announced its $125 million series C funding round.
Headway says it powers an average of 600,000+ therapy appointments per month.
The company streamlines credentialing, onboarding, clinical training, scheduling, billing and more, making it easy for mental health clinicians to accept patients through insurance.
Nine months after its series C round, Headway secured $100 million in series D funding, boosting its valuation to $2.3 billion, a 130% increase from its previous valuation, according to Headway executives. The startup has raised more than $321 million to date.
Headway has "clear line of sight to company-level profitability," Andrew Adams, founder and CEO of Headway, told Fierce Healthcare via email. Headway's revenue has more than doubled in the past 12 months.
"At our scale, that makes us among the fastest-growing companies in the U.S. In this capital market, being world-class at growth is not enough; we’re also world-class efficient, in terms of unit economics," he noted.
Spark Capital led the series D round, with participation from existing investors Thrive Capital, Accel and a16z, and new investor Forerunner Ventures.
Headway will use the fresh capital to fuel product development, grow its partnerships with commercial plans and accelerate its planned expansion to Medicare Advantage and Medicaid, Adams said.
The expansion will enable clinicians to provide affordable, effective mental health care to a broader and more diverse community of patients, including seniors, low-income Americans and individuals living with disabilities, he noted.
"There is a rampant need for increased access to mental health care services among these populations, and our community of clinicians overwhelmingly want to fill the gaps. When we surveyed providers on our platform last year about this topic, they said that the number-one reason they took insurance was to 'provide access to care for those that may not be able to afford private pay services'," he said.
In a survey of more than 1,000 clinicians conducted by the company last year, a majority reported that the top reason they took insurance was to "provide access to care for those that may not be able to afford private pay services," the company said.
Headway is building the "nuanced products and programs required to enable clinicians to accept patients from these plans," Adams noted.
Headway expects to be live with Medicare Advantage in all 50 states and Washington, D.C. by the end of the year, and live with Medicaid in 2025.
Medicare Advantage and Medicaid cover more than 100 million Americans — nearly one-third of Americans — who often experience higher rates of need. A March 2024 report from the U.S. Department of Health and Human Services says that despite the fact that one in three Medicaid beneficiaries and one in four Medicare beneficiaries live with a mental illness, access remains elusive due to a dire shortage of mental health providers. There are not enough mental health providers who can currently serve them.
"Government programs have an additional layer of operational burden, such as more complex credentialing processes and stricter compliance requirements, when compared to commercial plans," he said. "We’re investing in the technology to relieve this operational and administrative burden, and ultimately make it easy for clinicians to deliver care to these patients. This expansion will have a profound impact on populations we previously couldn’t serve at scale, as well as the 34,000 clinicians who actively use our platform to run their private practice."
There is growing demand for mental healthcare in the U.S., but many people fail to find care because they can't afford to pay for services out-of-pocket.
Adams faced these barriers after he moved to New York City and tried to find a therapist, he told Fierce Healthcare in 2020.
"I couldn’t find a therapist that I could afford because 70% of therapists don’t accept insurance," Adams said in a previous interview. "The reality is that therapists would accept insurance if it weren’t so hard."
He co-founded New York City-based Headway to address accessibility and affordability issues for mental health care services.
Headway’s unique approach to making the mental healthcare system more connected and equitable has really resonated in the market. Adams noted."We built something that works with therapists, that works with patients, that works with payers, rather than working around some of those segments," he said.
Since Headway's last fundraise in October 2023, the company has grown its community of providers by more than 30%, and more than doubled its number of in-network health plans.
"Our strategy of putting providers at the center of our strategy has clearly paid off; they love working with Headway and often refer their colleagues. Over the past 12 months, more than half of our new providers came from a referral," Adams said.
Headway plans to invest in building new tools and products that expedite Medicare and Medicaid credentialing timelines and compliance requirements for clinicians.
"Headway has made working with Medicare easier for me through enrollment, onboarding and navigating compliance expectations. I can truly say that I would not be accepting Medicare clients without Headway,” said Andre Maxie, LMFT, an early adopter of Headway’s Medicare Advantage expansion. “Accepting Medicare is important to me because it allows me to reach a population that has been historically underserved.”