Riding the wave of investor interest in virtual behavioral health startups, Modern Health has closed a $74 million series D investment round.
This latest investment brings the company’s total funding to over $170 million in less than two years and raises its valuation to $1.17 billion, according to the company.
That makes Modern Health the fastest entirely women-founded company in the U.S. to reach unicorn status, the company claims.
“If there is one thing we’ve learned from this past year, it’s that prioritizing employee mental health is critical for all companies – no matter the size. We should not have to wait until there is a global pandemic to take action,” said Alyson Watson, CEO and founder of Modern Health in a statement. “Business leaders have an imperative to prioritize the wellbeing of their workforces, because it directly impacts company productivity and performance – and because we care about our employees at work and outside of it.”
Founded in 2017, Modern Health offers a mental health benefits platform used by more than 220 employers.
The series D investment round was led by Founders Fund. Lachy Groom also invested in the round. The infusion of cash comes on the heels of Modern Health's $51 million series C raise in 2020.
Since that round in October, the company has already doubled its revenue driven by rising demand for mental health support during the COVID-19 pandemic.
In the past year, the startup also has tripled its employee headcount and doubled its customer base and is now serving clients like Pixar, SoFi, Okta, Carta, EA, Rakuten, Clif Bar, Zendesk, and Udemy. Modern Health launched 25 new enterprise customers in January 2021 alone, the company said.
The latest funding will help the company to continue to meet growing demand, scaling its evidence-based platform to support additional employers and offering a variety of accessible and customized mental health solutions to workforces worldwide.
The San Francisco-based startup offers a suite of mental health solutions comprised of digital programs, virtual coaching and clinical therapy available in 35 languages all available in a single app. Modern Health’s approach has proven successful for individuals and companies alike – more than half of registered employees on Modern Health’s platform are engaging with care, and a majority complete two or more therapy sessions, according to the company.
Modern Health recently acquired fellow behavioral health startup Kip for an undisclosed sum. The deal will further expand the company’s suite of mental health solutions and analytics. Kip connects users with qualified therapists and arms them with the tools to track observations, feedback, and outcomes about their mental health journey.
Mental health has become a core pillar of the corporate benefits stack, as employers recognize the impact of mental health issues on the workplace—which can result in as much as $500 billion of lost productivity per year.
COVID-19 has exacerbated an existing mental health crisis, one that will persist after the pandemic is resolved.
Brian Singerman, partner at Founders Fund, said Modern Health is on a trajectory to become a leader in the virtual mental health solutions market.
"It’s clear that now, more than ever, managing employee mental health should be high priority for today’s leading companies. Modern Health has created a new standard for enterprise mental health management, and is pushing the industry forward with its accessible, comprehensive platform," Singerman said.
The mental health space has seen record investment in the past year. Modern Health now joins Lyra Health as digital health unicorns in the virtual behavioral health space. Lyra Health recently scored $187 million in new financing and is now worth more than $2 billion.
Online therapy app Talkspace plans to go public through a merger with blank check company Hudson Executive Investment Corp. The deal values Talkspace—which connects users with licensed therapists via video chat or text—at $1.4 billion, including debt.