Mental health continues to be red-hot with investors with startups in the behavioral health space picking up sizeable funding rounds.
Spring Health, which offers digital mental health care and navigation services, pocketed $100 million in series E funding, bumping the company's valuation to $3.3 billion. That's up 32% from the company's $2.5 billion valuation just 15 months ago when it secured its series D round.
Al Gore’s Generation Investment Management led Spring Health's series E round with backing from existing investors, including Kinnevik, William K Warren Foundation, RRE and Northzone.
The fresh capital comes on the heels of raising $71 million in April 2023. The company also closed a $190 million series C funding round in September 2021. In total, the company has raised more than $470 million in venture funding.
Mental health startups secured significant funding in 2024 so far, with $682 million raised in the first half of the year, according to Rock Health. This is the highest amount of funding for any digital health care segment in the first half of 2024.
Last week, mental health startup Headway pocketed $100 million in series D funding, boosting its valuation to $2.3 billion.
The employer- and payer-focused mental health provider has grown its reach to more than 10 million covered lives, executives said in a press release. Spring Health works with 450 directly contract employers and health plans and 27,000 groups that access the solution through a channel partner, according to the company.
Spring Health counts multinational corporations Microsoft, Target, J.P. Morgan Chase and Delta Airlines among its employer clients.
The company has scaled up its solution to meet increasing demand for mental health support. Over the last three years, Spring Health’s revenue has grown substantially, Debbie Markowitz, chief financial officer at Spring Health, told Fierce Healthcare.
"I've actually never seen a company that has grown as quickly as Spring Health, and it's always been a focus of ours to do that in an efficient manner," said Markowitz, who joined the company four years ago. "Even when the world was thinking about growth at all costs, we had always been managing the business in a responsible and efficient way."
Last year, when it announced its $71 million funding round, Spring Health executives said the company planned to continue to invest in its services alongside its "path to profitability."
The latest investment funds will go towards product and technology development, expanding to new audiences and channels and exploring adjacent categories, Spring Health executives said.
Spring Health plans to expand its services into specialty care to treat members with higher acuity mental health care needs, including substance use disorder, Debbie Markowitz, chief financial officer at Spring Health, told Fierce Healthcare.
"We're going deeper on pediatric care and treatment-resistant depression and trauma," she added.
"Our north star at Spring Health is eliminating all barriers to mental health care for our members. We're constantly listening to our customers and members and ensuring that we are adapting to their needs," Markowitz said. "With that mission of eliminating every barrier to mental health care, we will continue to invest in our technology to ensure we're getting our members better, faster."
Founded in 2016, Spring Health offers what it calls "precision mental healthcare" that matches each employee and member to the most effective care for them. The solution includes mindfulness and meditation, care navigation, coaching, therapy and medication management.
Spring Health focuses on tracking care outcomes, an approach that is generally lacking among most mental health providers, according to Mill Brown, M.D., Spring Health's chief medical officer, in an interview in March 2023. The company's data reveal that its workplace mental heath program delivers clinical and financial outcomes, according to a peer-reviewed study published last year in JAMA Network Open.
Employers are facing an urgent mental health crisis among their workforces as the COVID-19 pandemic has exacerbated stress, anxiety and burnout.
External validation showed that Spring Health's customers saw a significant reduction in overall workplace and healthcare claims costs, including a 2.2x return on investment in health plan spend alone. In a study last year, health economics experts at the Validation Institute concluded that Spring Health customers lowered total health plan spend by $2,430 per participant within the first six months of engagement.
Earlier this month, the company announced it earned a three-year accreditation from the Commission on Accreditation of Rehabilitation Facilities (CARF), for adult and child outpatient care delivery, crisis response and crisis intervention programming. Spring Health claims that it is the first and only mental health solution to earn a nationwide, third-party accreditation for clinical care delivery and crisis programs.