Digital mental health tools for employees are in hot demand as employers look to better support workers during the COVID-19 pandemic.
Modern Health, a company that offers a mental health and wellness platform for employer customers, has seen rapid growth and banked a $51 million series C funding round. The financing comes less than a year after its $31 million series B funding round.
The latest round, announced Tuesday, was led by Battery Ventures. Other participants in the round include Felicis Ventures and existing investors Kleiner Perkins, Founders Fund, 01 Advisors, Afore Capital and Okta’s Frederic Kerrest.
Founded in 2017, Modern Health has raised more than $95 million and its current valuation sits between $500 million and $1 billion, according to the company.
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The company plans to use the funding to meet accelerating demand for its mental health services, expand its global provider network from 35 languages to more than 50 languages and continue to provide new, innovative solutions to support healthy workforces around the world.
The San Francisco-based startup offers a suite of mental health solutions comprised of digital programs, virtual coaching and clinical therapy.
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.
The number of covered lives on Modern Health’s platform has more than doubled this year, the company said.
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“With a shortage of therapists and rising costs blocking access to support, the mental health industry is reaching its breaking point. At Modern Health, we are dedicated to destigmatizing mental health in the workplace and ensuring as many people as possible get cost-effective mental health care,” said Alyson Watson, founder and CEO of Modern Health, in a statement.
“Every employee should have equal access to quality mental health support—and we will continue to expand our offering to respond swiftly to demand.”
Since the last round of funding, the company has tripled its employee headcount and doubled its customer base, now serving more than 190 enterprise clients globally. The company also has doubled the number of covered lives it serves since March 2020.
Enterprise clients include early adopters of the platform such as Pixar, SoFi, Okta, Carta, Electronic Arts, and Rakuten and a growing list of more recent additions, including Clif Bar, Zendesk, Udemy and TripActions.
A number of digital health companies are focused on mental health and the employer market. Lyra Health offers an array of in-person and remote behavioral therapy and scored $110 million in funding in August, boosting it to unicorn status.
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Other startups in the space include Ginger, which closed a $50 million funding round in August, Unmind and Spring Health, which landed a $76 million investment in November.
The company also announced that Roger Lee, general partner at Battery Ventures and lead investor in companies like Gainsight and StockX, as well as Penny Herscher, longtime technology industry thought leader and former CEO of Simplex and FirstRain, have joined its board of directors.
“Employers are waking up to the fact that their medical claims costs were already heavily driven by mental health issues going unaddressed,” said Herscher.
“The pandemic is shining a spotlight on a larger problem, and the companies who address it now will be the ones who keep costs under control and deliver successful profits moving forward. Modern Health’s innovative solution addresses urgent disparities in mental health care access and delivers personalized care recommendations to meet individuals where they are. It’s an absolute honor to join this visionary company as it grows.”