Hazel Health nabs $51.5M to fuel expansion and scale up school-based physical, mental health

Hazel Health, a K-12 school-based telehealth provider, landed a $51.5 million series C1 funding round that will be used to continue its mission of bringing digital health support to all K-12 schools regardless of family income or background.

The provider of digital pediatric mental health and physical health said it will use the funds to expand its national reach, workforce and investment in its technology stack. Hazel is now in 14 states and 3,000 schools where it reaches nearly 2.5 million students. Recent growth helped pass the milestone of 10% of K-12 students in the states where Hazel operates now accessing physical and mental health care at school and at home.

“Schools are phenomenal places where there has been universal care and access for everyone: The school nurse and school council, they don't ask for your insurance; they're not checking your documentation,” Hazel Health CEO Josh Golomb, told Fierce Healthcare. “We on the healthcare side have to bring resources in. There is a provider shortage, but some of that is because the way that most kids access care today is out of school when parents are out of work, which might be 5 to 10 p.m. at night. If you can find a way to open up school hours that doesn't distract from instruction, you can, without adding any more providers, open up a lot of capacity.”

Funding was achieved by Tao Capital Partners, Owl Ventures, Firework Ventures, Carrie Walton Penner through Fiore Ventures and Hermann Memorial. A strategic investment with Children’s Memorial Hermann included a partnership between the telehealth company and the Houston health system’s pediatric network.

Recent months have brought a slew of new partnerships for Hazel with over 20 school districts in Nevada, Florida, Washington, Georgia and Hawaii signing on for the service. Through an expansion in Nevada’s Clark County School District, 80% of students in the state are now having their mental and physical health needs met.

The partnership with Hawaii Department of Education marks the first-ever statewide student coverage partnership for mental health services. The $3.8 million initiative will support 170,000 students across 295 schools.

Hazel states that its mission is “to ensure that all children, regardless of family income, geography, race, ethnicity, insurance or immigration status, have access to high-quality health care so they can feel their best and ready to learn.”

Hazel’s fees are covered by a blend of insurance reimbursement, fees paid by school districts and various federal initiatives which can be used by school districts to fund programs supporting students’ physical and mental health.

“The first years for us was building this model where kids, while they're at school, could see one of our doctors, nurse practitioners, PAs [physician assistants] and tackle everything as simple as pinkeye, which if you don't have access to a doctor, you know, as simple as that is to treat and keep you out for multiple days, to kids that maybe have asthma that wasn't being diagnosed or treated,” Golomb said. “And so kids, especially in more rural parts of the country, where they might be missing tons of school, we saw that we could really help them that way.”F

When Hazel launched in 2015 as a digital health provider, it found the physical health challenges students were facing could not be siloed off from the rest of their lives. In the average 28-day wait time to see a doctor, Hazel saw students begin along a path to chronic absenteeism, which can feed into reading levels, graduation rates and even incarceration rates.

Hazel’s metrics showed that treating kids in the school nurse’s office, not requiring missing a day of class or a parent scrounging to get time off work, decreases early dismissals and absenteeism.

Golomb said that school-based therapy also enables students to receive care in a space where they already feel comfortable as opposed to a strange medical facility.

Hazel expanded to digital mental health support in September 2021, the same month the American Academy of Pediatrics, the American Academy of Child and Adolescent Psychiatry and the Children’s Hospital Association declared a national emergency in children’s mental health.

“Even before COVID hit, we were seeing such a need for mental health services because a good number of kids that would come into our clinic with perpetual headaches or stomachaches and weren't faking,” Golomb said. “Our doctors traced them to underlying mental health issues like anxiety or depression. Our first goal was, let's just connect them to a great local community provider that can see them because a lot of school districts already have someone they work with but the waitlist was so long that we realized that part of the solution for kids' needs to be bringing more capacity to those kids and not just any capacity but really culturally competent care.”

More than half of Hazel providers are providers of color and over 30% speak a second language fluently. This way not only can students communicate in their mother tongue, but they no longer must function as a translator for their parents.  

While states like Hawaii do not require state-licensed therapists to reside in the state, Hazel works to connect students in Hawaii with providers that at one point lived in the state. This way, cynicism about mainlanders is avoided, cultural shorthand is shared, company executives said.

The 2022 Mental Health America report revealed that 71% of Hawaii's youth with at least one major depressive episode are not receiving treatment.

According to the American Academy of Child and Adolescent Psychiatry (PDF), about 1 in 5 of children with mental, emotional or behavioral disorders receive care from a specialized mental health care provider.

“We're investing across the spectrum both in expanding to more districts but also more functions,” Golomb said. “One of the first students we saw was a middle schooler whose father passed away from COVID. We met the mom, they got the referral in, and this child was on a seven-month waitlist, which for someone who just lost her father, it kind of blows your mind. Our case manager reached out, we set up the appointment, and told the mom we could see her daughter on Thursday, the mom’s immediate response was, ‘Thursday of what month?’”

Students can be referred to Hazel’s mental health services by any adult in their life. After an assessment, students start with six to 10 sessions. For the high percentage of kids, Golomb says that is enough. For others, longer care plans are established within the student’s community.

Hazel can triage patients that require short-term support while safeguarding in-demand providers for the students whose cases are most dire.

“When we go into a community, we talk about ourselves as supporting the local health ecosystem, because Hazel is not meant to replace any of those providers, if anything, it's to help them identify patients that are the best fits and get them to the right place,” Golomb said.

So far, the company has raised a total of $112.5 million including a $33.5 million series C round in September 2020. Within the 2021-2022 school year, Hazel provided 15,000 mental health sessions.

Other pediatric behavioral health providers dominate notable corners of the market. Brightline has raised $212 million to date, and Elemy reached unicorn status in October of last year after scoring $219 million.

This week, edtech company Vivi also announced a partnership with the mental health giant Headspace to bring mindfulness and meditation practices into K-12 classrooms. The teacher-led practice was designed by Headspace to reduce stress and anxiety in class. 

Almost 1 in 5 teens reported seriously considering suicide, 20% have experienced a major depressive episode and 36.7% of high schoolers described feeling sad or hopeless, according to the Centers for Disease Control and Prevention.

This summer, $300 million was pledged by the Biden administration to increase mental health services in schools.