Headway raises $70 million in Series B funding round to develop its mental health platform

The pandemic has certainly highlighted the importance of mental health. Covid-19 has brought many people down with illness or worse, but it has also brought increased isolation, economic uncertainty and many other kinds of disappointment, and all of this has had a ripple effect on our collective and individual state of mind.

Headway focuses on mental telehealth by offering a platform where users can find the right therapist, which they can also afford. Through a free portal, therapists have the ability to accept more insurance plans, making it easier to get more therapy appointments for their patient networks.

The mental health visionary plans to use the $70 million USD it raised in this latest round to further develop its platform through additional partnerships, hiring – the company expects to grow to 300 people during this year – and geographic expansion as it plans to go national in the US by the end of the year.

The Series B round was led by Andreessen Horowitz, followed by Thrive, GV and Accel. Thrive and GV led its Series A round, while Accel led its seed round.) This latest round bring total company valuation to $750 million.

The rapid pace of funding, the backers and this valuation all point to the timeliness of the concept, as well as the interest in Headway’s approach.

Indeed, just six months ago, Headway had raised $26 million and had 1,800 therapists registered on its platform in the New York metropolitan area, where its headquarters are located. Today, the platform counts over 3,000 and its network now covers New Jersey, Florida, North Carolina, Texas, Georgia, Michigan, Virginia, Washington, Illinois and Colorado. More than 2,000 patients join the service each month and it has so far facilitated 300,000 appointments, an average of 30,000 appointments per month. Its revenues have increased ninefold in this year alone. 

The mental health visionary is distinguishing itself not only by offering a vertical search portal for therapists, but also by building a back-end system to help those therapists grow their business by making it easier for them to accept insurance coverage.

The solution was developed from the experiences of one of the startup’s co-founders, Andrew Adams, who explained that after moving to New York from California several years ago to find a job, he found that most therapists refused to accept his insurance, making therapy unaffordable.

He goes on to explain that this is a typical problem, with over 70% of therapists not accepting insurance today because of the complicated logistics involved, when 85% of therapists are independent practitioners. This severely limits equitable access to mental health practitioners, who are only available to those who can afford them or who have joined the few social programmes that provide them. 

According to Adams, Headway addresses this problem at its root, as it bypasses the complications of health insurance, built around a medical world dominated by billers and administrators. He insisted that therapists are small practitioners who don’t have the bandwidth to deal with these complications, so they just don’t do it. The platform addresses these complications, making it easier for them to accept health insurance, and they do. 

The platform directly contributes to the optimisation of mental health provision, allowing patients and therapists to forget about logistics and focus on what really matters: quality therapy for those who need it most. 

In the United States alone, an estimated 82 million people suffer from treatable mental disorders, and most of them don’t seek treatment due to cost and accessibility. This is exactly what Headway seeks to address.

Another interesting fact is that traditionally much of the therapy has been face-to-face, which is also one of the reasons why the reduction in contact due to the pandemic has contributed to the mental health problems of the past year. 

Yet Headway, like most telehealth platforms, has addressed this problem. Indeed, according to the company, 89% of its appointments are currently made remotely. This is down from 97% at the height of the pandemic in the US, and is slowly starting to decline, according to the company. Part of the increase in volume is directly related to therapists working remotely, which allows them to fit more people into their daily schedules.

As far as insurers are concerned, Headway is currently partnered with Aetna, Cigna, United Healthcare, Oscar and Oxford and says the list will grow. 

An interesting detail is that Headway has not only built a larger funnel for these insurers in terms of the practitioners they work with and the individuals who can then use the insurance to pay for the therapy, but conversely has acted as a conduit for these insurance groups by bringing more patients to these therapists, who are now part of their networks, through the Headway platform.

In addition to expanding the networks of both therapists and insurers, the platform also helps to reduce delays by using a system that can help a patient get an appointment within five days, compared to the average of 30 days when using an insurance directory.

The scale and quality of the software, as well as the relevance of the solution at this time, is exactly what attracted Andreessen Horowitz.  Scott Kupor, managing partner at Andreessen Horowitz, said that “by getting the mental health provider community on the same page as insurance companies for the first time, Headway makes affordable mental health care available to millions of Americans.” 

Cherry Miao, former partner at Accel and Headway’s lead seed investor, also joins the team as head of finance and data.

Following this latest Series B, she said she was excited to be part of a solution that aims to rebuild the US mental health care system for access and affordability. She also praised Headway’s mission, strong business model and great team.