Wayspring banks $75M funding round with investment from Centene, Highmark

Substance use disorder (SUD) treatment startup Wayspring just brought in a $75 million funding round that included backing from major payers such as Centene Corporation, Highmark and the Blue Venture Fund.

Wayspring, formerly axialHealthcare, operates a value-based, medical home model for substance abuse disorder treatment. The company said it plans to use the investment to further scale up its model.

The model includes community-based peer support, behavioral health services and primary care. Wayspring partners with existing provider networks to direct members to high-quality treatment, manage care transitions and ensure adherence to medication-based treatment.

Wayspring partnered with three health plans in 2020, and since then it's driven notable savings by reducing inpatient treatment admissions, hospital admissions and emergency department visits, the company said.

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"We are extremely excited to announce this important investment by some of the leading investors in healthcare," said Carter Paine, CEO of Wayspring, in a statement. "The team at Valtruis has a strong track record of investing in and scaling transformational healthcare companies. Together, we are building an innovative solution that holistically addresses the complex and heartbreaking challenges that individuals with SUD and their families face daily."

Valtruis, the new value-based care portfolio company from Welsh, Carson, Anderson & Stowe, was the lead investor in the funding round, with backing from Centene Corporation, CareSource and HLM Venture Partners.

Existing investors Highmark Ventures, .406 Ventures, the Blue Venture Fund and Oak HC/FT also contributed.

"We are thrilled to back the Wayspring team to help solve the enormous issues confronting the SUD community. This investment marks the second time that Carter and I have partnered with Welsh Carson to build a value-based care platform to tackle a pervasive and growing healthcare issue, in this case substance use disorder," Karey Witty, managing director with Valtruis and an operating partner at Welsh, Carson, Anderson & Stowe, said in a statement. 

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"Incredibly, more than $90 billion is spent annually on the SUD population by Medicaid and Medicare Advantage managed care organizations and other risk-based, delegated entities. And, unfortunately, only 10% of the population receives treatment," Witty said.

Treatment for problematic alcohol use, suicidality and complex illnesses that require specialized care can be difficult to access. 

Healthcare startups are trying to tackle substance use disorder and addiction. Bicycle Health, a virtual care provider of evidence-based treatment for opioid use disorder (OUD), recently banked a $27 million series A investment. Since the start of the pandemic, Bicycle Health has grown 30% month over month and is now the largest virtual care platform for OUD by geographic footprint and insurance coverage, the company said.

Lyra Health, a provider of mental health benefits for employees, also rolled out new offerings to tackle more serious mental health issues such as alcohol use disorder and suicidality.

Pear Therapeutics developed a digital therapeutics called reSET for the treatment of patients with SUD that received FDA clearance. The company has raised $284 million in venture capital to date.

According to Crunchbase, 21 upstarts in the addiction space, most seed or early-stage, raised rounds in the past couple of years.