On-demand mental health company Ginger is the latest digital health startup to reach unicorn status following a series E funding round.
San Francisco-based Ginger raised $100 million backed by investment firm Blackstone Growth, boosting its valuation to $1.1 billion, according to the company.
Blackstone joins existing investors from Kaiser Permanente Ventures, Cigna Ventures, Bessemer Venture Partners, Advance Venture Partners, Khosla Ventures, Health Velocity Capital, City Light Capital and WP Global Partners.
The company banked a $50 million series D funding round in August. The startup, which delivers evidence-based behavioral health coaching, therapy and psychiatry right from a smartphone, has raised more than $220 million to date.
It's the first digital health investment for Blackstone. The investment firm had been looking for the right mental health play, which lead investor Ram Jagannath says he found in Ginger’s "unique and scalable value-based model - text-based coaching, therapy and psychiatry all under one roof, for a fixed fee."
"We’re proud to invest in Ginger, whose mission to expand access to high-quality mental healthcare through innovative technological solutions is only becoming more important. The company’s exceptional team has built a world-class, scalable care model that benefits individuals, employers, and payers – and we’re excited to partner with them moving forward," said Jagannath, who serves as global head of healthcare for Blackstone Growth and Blackstone Tactical Opportunities.
The investment round comes as Ginger reported that revenue has tripled year-over-year for the past three years. The company now works with more than 500 employer customers ranging from startups to Fortune 100s, including ViacomCBS, Delta Air Lines, Domino’s, SurveyMonkey, Axon, 10x Genomics, and Sephora, according to the company.
Ginger also works with strategic partners like Accolade and Capsule, and 30 integrated health systems and health plans.
Demand for Ginger’s services increased three-fold during the pandemic, company executives said.
“The past year demonstrated how employers, health plans, and investors are ready to double down on solutions that address the global mental health crisis,” said Russell Glass, CEO of Ginger in a statement. “With this round of funding, we will continue to advance our technology, further our research to improve outcomes, and expand care access within underserved populations.”
Last year, Ginger introduced a value-based model that allows employers to offer every eligible employee and adult dependent access to Ginger’s entire spectrum of care for a fixed fee, including unlimited self-guided care, 24/7 on-demand behavioral health coaching, and a predetermined number of therapy and psychiatry sessions.
In the last 12 months, nearly 60% of Ginger’s new clients have adopted this option for their employees, demonstrating a significant desire for value-based models in mental healthcare, according to a press release.
With this latest round of funding, Ginger plans to grow its partnerships with multinational employers while also quickly expanding outside of the employer market, including ramping up health plan partnerships, executives said.
In the first half of the year, the company also plans to extend its reach to support underserved populations through new government payer relationships and collaborations with nonprofit organizations.
Ginger also plans to use the funding to acquire innovative technologies and clinical services to improve and scale its on-demand mental health system.
In a video interview with What's the Future Health's Jessica DaMassa, Glass said the company was "aggressively looking at M&A."
"We're hoping to announce something in the relatively near future. There are lots of companies doing interesting things in this space, but they are sub-scale. So we're looking at being able to take Ginger's scale and bring some of these technologies in to get those solutions to people faster," he said.
The COVID-19 pandemic has created a significant increase in demand for mental health support. According to Ginger's Third Annual Workforce Attitudes Toward Mental Health Report, 48% of employees report experiencing high to extreme stress over the past year - a 7% increase over the last two years. At the same time, the number of employees who have used technology-based mental health support has increased significantly by 66%.
Digital mental health companies have been raking in investor dollars in the past year. Modern Health’s scored a $74 million Series D in February, Lyra Health raised $187 million in January, and Spring Health, a provider of a mental health benefits platform for employers, landed $76 million in series B funding in November.
Digital health veteran Jesse Silver has joined the company as chief product officer. Silver has served as vice president of product at Omada Health, led design work at IDEO, and most recently was senior vice president of product at PAX Labs.
Ginger also announced that Jagannath has joined its board of directors.