Mental health startup Ginger lands $50M backed by Cigna, Kaiser Permanente

San Francisco-based startup Ginger just banked a $50 million Series D funding round to expand its on-demand mental health services.

The round, led by Advance Venture Partners and Bessemer Venture Partners, included participation from Cigna Ventures and existing investor Jeff Weiner, executive chairman of LinkedIn, as well as Kaiser Permanente Ventures.

The startup, which delivers evidence-based behavioral health coaching, therapy and psychiatry right from a smartphone, has raised more than $120 million to date.

The current mental healthcare system has long been inadequate, according to Ginger CEO Russell Glass. 

"But in the midst of a worldwide pandemic and a tumultuous sociopolitical climate, we're facing uncharted territory," Glass told Fierce Healthcare.

The company has seen record-high demand for mental health support during the current health crisis. During July, weekly utilization rates were 125% higher for coaching and 265% higher for therapy and psychiatry when compared to pre-COVID-19 averages, the company reported.

"There’s a huge and growing need to address the mental health supply-demand imbalance and that has accelerated massively. There are so many people who need access to behavioral health services," he said.

According to Ginger’s 2020 Workforce Attitudes Toward Mental Health Report, nearly 70% of U.S. workers believe this is the most stressful period of their careers, including major events like the September 11 terror attacks, the 2008 Great Recession and others.

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Ginger has more than tripled its revenue over past year and also seen significant growth with its enterprise clients. "People are demanding better care, and the largest payers of healthcare are recognizing the need to respond," Glass said.

Ginger raised the latest funding round to expand its on-demand mental healthcare system to help address these needs. Ginger plans to focus on R&D and innovation to provide its clinicians and psychiatrists with better decision support tools and other capabilities.

The company also is increasingly focused on partnerships with health plans, Glass said.

Insurers recognize that the current challenges with access to mental heath care does not get solved with adding more providers to their networks, he said.

"They recognize that they need to invest in innovation and solutions," he said.

Ginger was founded in 2011 as a spinout from the MIT Media Lab to provide on-demand mental health services. The company evolved to become a virtual behavioral health care system and offers full-service online and app-based mental health services.

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More than 200 companies ranging from startups to Fortune 100 companies, including Delta Air Lines, Sanofi, Chegg, Domino’s, SurveyMonkey, and Sephora, partner with Ginger to provide employees with high-quality mental healthcare, according to the company.

Ginger members can also access virtual therapy and psychiatry sessions as an in-network benefit through the company’s relationships with regional and national health plans, including Optum Behavioral Health, Anthem California, and Aetna Resources for Living. 

“At Cigna Ventures, we are committed to investing in bold, new ways to make high-quality healthcare simpler and more affordable,” said Sahil Choudhry, managing director at Cigna Ventures, said in a statement.

“We believe that Ginger is well positioned to make this a reality in mental healthcare and look forward to supporting their efforts to expand access to this innovative model," Choudhry said.

Ginger will continue to focus on what Glass sees as its core differentiators which include providing on-demand care and access to behavioral health coaches 24/7.

The company’s proprietary collaborative care model has been proven to be more than twice as effective as standard therapeutic interventions, according to the company. Seventy percent of people using Ginger experience an improvement in their depression symptoms within 10 to 14 weeks, the company reports.

Moving forward, Ginger is looking to expand into adolescent care and to provide mental health care in multiple languages, Glass said.

Along with the funding round, Ginger also announced that David ibnAle, founding partner of Advance Venture Partners and Steve Kraus, partner at Bessemer Venture Partners, have joined the company's board of directors.