Spurred by the demand for mental health services during the pandemic, Lyra Health is now worth more than $2 billion.
The startup scored $187 million in new financing as it looks to expand its services and bring more technology to its platform.
The Burlingame, California-based company, which provides mental health benefits for large employers, has more than doubled its customer base in 2020 and extended its services to support more than 2 million members, the company announced Thursday.
The series E financing was led by investor Addition and joined by new investors Durable Capital Partners LP, Fidelity Management & Research Company and Baillie Gifford, along with other existing investors.
Globally, mental health startups raised a record high of $2 billion in equity funding in 2020, according to CB Insights.
Lyra Health landed a series C financing round of $75 million back in March 2020 and then an additional $110 million series D funding round in August, which propelled Lyra to unicorn status as its valuation hit $1 billion.
The company has raised close to half a billion, or $462 million, to date.
In August, Lyra Health projected it would hit more than $100 million in revenue by the end of 2020.
"Over the last six years, we worked hard to build a solution that changes the experience for people in need of mental healthcare and makes it easier to connect with high-quality care quickly so they can develop the skills to help them manage their lives," David Ebersman, Lyra Health CEO and co-founder, told Fierce Healthcare.
In the U.S., close to 48 million people, or 1 in 5 adults, experienced mental illness in 2018, according to the National Alliance on Mental Illness.
"When we started the company, we felt that mental health was one of the biggest and most important problems of our time. We don’t do a good job of getting people to effective care, and 50% of people are unable to access quality care when they need it," Ebersman said.
The company offers an array of in-person and remote behavioral therapy that helps remove barriers to accessing high-quality mental health care.
The cash infusion will enable Lyra to invest further in pioneering tech-enabled mental health care, a growing and diverse provider network, and new partnerships to support the world’s largest global organizations, the company said.
Both employers and investors are showing an increased interest in virtual mental health services, Ebersman said.
"Tailwinds existed, but it's been slow. Going back decades, many health plans didn’t offer mental health care at all. Legislation has been passed promoting and requiring parity, and mental health has become recognized as part of the healthcare system that we should invest in," he said. "We particularly see with the younger generation of workers, who are important to employers, that they are more willing to speak up for what they need and seek mental health care when they need it."
COVID-19 is having a massive impact on employees’ mental health, and that has accelerated employers' interest in digital behavioral health solutions. More than 83% of U.S. employees are experiencing mental health issues, according to research Lyra Health conducted in 2020 in partnership with the National Alliance of Healthcare Purchaser Coalitions. Additionally, 40% of workers feel employers don’t support their mental health.
The company offers its services as a benefit to employers including Morgan Stanley, Zoom Video Communications, eBay, Uber, NetApp and Genentech.
Lyra Health also announced Thursday a new partnership with global benefits company ICAS, which now allows it to provide some level of mental health parity to employees at a global scale. The partnership extends Lyra's benefits, including coaching, therapy, self-care, critical incident support, a 24/7 care line, manager training and work-life services, to customers and members in more than 180 countries.
ICAS is a global employee assistance program provider with operations in more than 43 in-country offices, covering 2,400 organizations and 4.5 million people.
“The amplified need for mental health care isn’t limited to the U.S.— this is an issue that affects people around the world, and one that is increasingly urgent due to the COVID pandemic,” said Sean McBride, vice president of partnerships at Lyra, in a statement. “Lyra is dedicated to transforming mental health care for both individuals and employers on a global scale, and we’re proud to work with ICAS to continue to support companies that are making mental health and well-being a priority for their people and leading by example.”
Lyra wants to invest in more services to open up access to care for more consumers, Ebersman said.
"Among the most common things we see today are depression and anxiety, but behavioral health affects people beyond those conditions to include alcohol abuse, substance abuse and eating disorders, and there is an opportunity to develop services for everyone who comes to Lyra," he said.
Last year, the company introduced an enhanced teletherapy offering, called Lyra Blended Care, which pairs video therapy sessions with personalized digital lessons and exercises based on cognitive behavioral therapy principles. The company plans to continue the expansion of Blended Care to serve Lyra members—including couples and adolescents—who are experiencing a range of mental health challenges.
The company also has teamed up with mental health app Calm to make it easier for employers to offer a wide range of mental health tools from a single platform.
“2020 put the need for mental health care transformation in sharp focus, as more people sought help during these extraordinary and difficult times,” Ebersman said.
“The traditional mental health care system cannot address the critical needs people have today. Lyra is now able to directly support more than 2 million members as we enable employers to offer their people easy, effective access to clinically proven mental health care. This latest financing round will allow Lyra to continue to develop new and innovative care solutions while reaching new customers and members," he said.