US-based mental health startup Headway is reportedly raising a new funding round, which will value that company at $2.3 billion. As per the report, this will roughly double its valuation from a year earlier.
The financing round will include nearly $100 million led by Spark Capital (which invested in Materia and The Bot Company) alongside participation from Headway’s existing investors Thrive Capital, Accel, Andreessen Horowitz and Global Founders Capital.
Notably, the unicorn raised $100 million in a funding round early last year, which valued it at over $1 billion.
What challenge does it tackle?
One in four Americans have a treatable mental health condition, but most don’t get care. The number one reason is price. It is estimated that 70% of therapists don’t accept insurance because of the administrative burden. This means individuals have to pay out of pocket prices they can’t afford.
Headway is building the first asset-free national network of therapists who accept insurance. This helps therapists build their practices while helping individuals find great care they can afford.
How was the idea born?
When Andrew Adams first moved to New York City from California, he struggled to find a therapist who would accept his insurance. Soon he realised he was not alone in this struggle. Frustrated by the process, he set out to build a platform that connects those seeking therapy with licensed therapists who would accept their insurance, with the mission of building a new mental healthcare system focusing on access and affordability.
In 2019, he joined co-founders Jake Sussman, Dan Ross, and Kevin Chan to create Headway.
What does Headway do?
Headway connects people with therapists and can handle tasks like looking up benefits and booking appointments. The company doesn’t charge patients for its search service, nor does it charge therapists. It is paid by insurance companies, so it’s free for you to use. It takes a commission from insurance providers, which pay it to enable wider access to more therapists for their policies. For each appointment, Headway pays providers upfront and takes a cut of the reimbursements made by insurance companies.
Late last year, the startup said it had expanded its service to all 50 states and was working with more than 25 insurance plans. Headway, which has more than 500 employees, also said that there are about 33,000 providers on its platform.
What do we think about Headway?
The company is addressing a critical gap in mental health care access, has demonstrated strong growth and effective scalability. With its innovative model ensuring therapists accept insurance and recent $2.3 billion valuation, it shows substantial promise. The successful expansion to all 50 states and collaboration with major insurers signal a robust future, likely solidifying its leadership in mental health tech.
