By Krystal Hu
(Reuters) – Headway, a healthcare tech startup that connects patients and in-network therapists, has raised $125 million in Series C funding, the company told Reuters.
The round of financing, which valued the company at $1 billion, was led by Spark Capital with participation from existing investors including Thrive Capital, Accel, and Andreessen Horowitz. Insurance company Health Care Service Corporation also joined the round.
Based in New York, Headway’s platform connects patients with therapists and psychiatrists who can provide care covered by insurance. It also offers billing and claims software for providers.
Andrew Adams, chief executive at Headway, said the startup stands out for its provider-first approach. The company makes money by taking a cut of the payments that therapists on its platform receive from insurance companies.
“We’ve seen a whole class of entrepreneur therapists because we have unlocked the barriers to launch and grow your businesses. We’ve made accepting insurance easier, which means attracting way more patients,” Adams said in an interview.
The company plans to use the funding to invest in expanding its network and increase marketing to help providers on the platform acquire patients. It says it now runs one of the largest networks of therapists and psychiatrists in the U.S., with 25,000 providers participating in-network with 19 insurance plans.
The pandemic prompted more people to turn to mental health services to deal with stress and burnout. As they looked for easier ways to access care, the sector attracted billions of funding from venture capitalists.
“We saw Headway emerged as this one piece of technology that supports providers and patients’ payers, bringing together all these fragmented systems to finally deliver quality accessible mental health care,” said Will Reed, investor at Spark who is joining the board of Headway.
(Reporting by Krystal Hu in San Francisco)
