Startups tackling substance use disorder, many of them using virtual care platforms, are attracting the attention of investors and bringing in major cash to scale up their businesses.
Ann Arbor, Michigan-based Workit Health, a clinic for virtual drug and alcohol treatment, is the latest startup to raise significant funding. The startup clinched $118 million led by New York-based global private equity and venture capital firm Insight Partners with participation from CVS Health Ventures, FirstMark Capital, BCBS Venture Fund and 3L Capital.
The fresh capital will enable Workit to expand into new regions this year and next, with plans to be national by 2023.
The investment comes in the wake of heightened demand for telemedicine options during the COVID-19 pandemic, resulting in a 400% increase in Workit Health membership over the past 18 months, the company said in a press release.
Workit Health plans to use the funding to accelerate its growth into new markets as well as expand its primary and psychiatric care offerings, bringing effective care for substance use and co-occurring conditions to people from the privacy of their own homes.
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“Workit is at the forefront of massive acceleration in telemedicine adoption, which is key to solving the overdose crisis that was exacerbated by COVID-19. The risk factors associated with substance use have dramatically increased,” said Lisa McLaughlin, Workit Health’s co-CEO, in a statement. “This latest funding round helps us grow our relationship-based, telehealth-first, value-based approach into new regions that are in desperate need of simple and trusted solutions like Workit.”
McLaughlin and Robin McIntosh co-founded the company in 2015 after their own experiences with broken treatment systems. Workit improves outcomes for substance use disorder and co-occurring conditions, allowing people to receive evidence-based clinical care—including medication for substance use and mental health—the moment they’re ready, via the Workit app, according to the company.
“Workit Health’s evidence-based virtual offering is transforming how substance use and mental health care is delivered for those suffering from many forms of addiction,” said Josh Flum, chief strategy and business development officer at CVS Health, in a statement. “Building upon our existing relationship, this investment in Workit Health further demonstrates CVS Health’s commitment to make health care more affordable, accessible and simpler.”
The company's data show 84% of Workit members stay in the program longer than 30 days, compared to an industry average of 33% of patients staying in traditional treatment the first month. And, 41% of Workit members receive treatment for longer than one year.
Workit members report a reduction in addictive behavior and also a decrease in anxiety alongside an increase in healthy habits like exercise and controlled spending.
“We’re establishing a new model for addiction care in America, and proud to be working with partners at the cutting edge of high growth in health care and technology,” McIntosh, who serves as co-CEO, said in a statement. “We lost a record-breaking 90,000 people to overdose deaths last year due to an outdated treatment system. Thousands of inpatient programs shuttered, leaving patients nationwide stranded and cut off from access to care. With Workit, starting on the journey to recovery is as simple as downloading an app. Our ultimate goal is to democratize access to addiction care for anyone who wants it.”
Virtual rehab is on the rise, boosted in part by the shift to telehealth during the pandemic. Groups Recover Together, a provider of medication-assisted treatment for opioid addiction with a portfolio of clinics that operate in 12 states, raised $60 million in series C financing back in May, backed by Oak HC/FT, Bessemer Venture Partners, Transformation Capital, RRE Ventures, Optum Ventures and Kaiser Permanente Ventures.
Quit Genius recently raised $64 million for its telehealth addiction treatment. The company says revenue grew by 10 times in the past 12 months, and it now partners with 55 employer and health plan clients, covering 2.1 million lives.
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Another startup, Ophelia, uses telemedicine to provide medication-assisted treatment and raised $15 million in fresh capital in April; Bicycle Health, a virtual care platform for opioid use disorder, scored a $27 million funding round back in June.
Wayspring also just brought in a $75 million funding round that included backing from major payers such as Centene Corporation, Highmark and the Blue Venture Fund.
According to Crunchbase, there are 21 upstarts in the addiction space, most seed or early stage, that raised rounds in the past couple of years.
Workit Health provides telemedicine visits and medication e-prescribed to a local pharmacy, as well as online recovery groups, an interactive therapeutic curriculum and direct messaging with a care team. In 2021, Workit Health’s offerings expanded to include primary care for commonly occurring physical conditions like hepatitis C and PrEP, and psychiatric care including depression, anxiety, insomnia and ADHD.
The company offers licensed clinical support for substance use disorder and co-occurring conditions in ten states and also offers a coaching and counseling program nationwide.