Headway, a US-based healthcare tech firm that connects patients with therapists to improve their mental health, has raised funds of $125 million at a valuation of $1billion in series C funding.
This is the fifth round of financing that valued the mental health startup at $1 billion was led by Spark Capital with some existing investors being Accel, Thrive Capital, and Andreessen Horowitz. Health Care Service Corporation, a US-based insurance company also participated in the round.
Based in New York, US; Headway is a mental health firm that connects its patients with therapists and psychiatrists through its digital platform. Most of the treatment and consultation given is on insurance and also does offer a billing and claims software for the health professionals.
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Why do they stand out?
Headway’s Chief executive officer, Andrew Adams said that the mental health startup standouts among its competitors because of its provider-first approach. Hence, the company makes revenue by taking a commission from the therapists on its platforms that receive money from the insurance companies.
In an interview Adams noted that they have seen a whole bunch of entrepreneur therapists and psychiatrists giving their services through the headway platform. The few reasons he mentioned for this trend is that headway has removed the barriers for therapists to open up and grow a business. They have made insurance acceptance procedure really easy which attracts mre patients to come to the platform.
The company is planning to utilize the funding raised in the current round to expand its network and help service providers to market their services to the patients. According to Headway, it currently operates the largest network of therapists and psychiatrists in the US with over 26,000 providers working under 19 different insurance plans.
One of the major reasons that the platform is so popular among the patients is that it provides convenience and ease, and the pandemic prompted more people to to turn to these services. Moreover, during the COVID-19 pandemic people were mentally stressed sur to social distance measures and had prompted many people to look after their mental health.
Many venture capitalists and investors were also attracted by looking at the traction of patients towards the platform and mental health awareness among the masses. Will Reed, an investor at Spark noted that, “We saw Headway emerged as this one piece of technology that supports providers, patients and payers, bringing together all these fragmented systems to finally deliver quality and accessible mental health care.”
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Previous funding rounds
Headway had previously raised funds four times in past four years from multiple investors, Accel, Thrive Capital, and Andreessen Horowitz, being the main investors. It initially raised an undisclosed amount in the pre seed round in 2018.
It then raised a seed round of $4.5 million in July 2019; a series A round of $26 million in 2020 during the peak covid era and then the series B round of $70 million at a net valuation of $750 million in 2021. Since then it has sustained its operations without raising any other round until now.
