Talkspace is going public through a merger with the special purpose acquisition company (SPAC) Hudson Executive Investment Corporation (HEIC). The subscription-based therapy provider announced the $1.4 billion deal Wednesday.
Headquartered in New York City, Talkspace aims to help more people access behavioral health care by remotely connecting users to licensed therapists through text and video chats. It provides services directly to consumers, as well as through company-sponsored health plans.
Since the company’s founding in 2012, it has served more than two million people and raised more than $106 million, according to the fundraising tracker website Crunchbase. Plus, it’s won the endorsement of celebrities such as Demi Lovato and Michael Phelps, who partner with the company for advertising campaigns.
Currently, the virtual mental health provider has about 2,600 providers treating around 46,000 active members, Talkspace said during an investor presentation Wednesday morning.
News of the deal comes about two months after Bloomberg first reported that Talkspace was eying a potential sale amid increased interest in the company, especially from SPACs, which are designed to take organizations public without going through the traditional IPO process. At the time, Talkspace CEO Oren Frank stopped short of confirming the sale rumors but verified the fact that interest was high.
“Interest in acquiring the company is not new — and as demand for telehealth services has grown dramatically over the months of the COVID-19 pandemic, that interest has grown with it,” Frank told Behavioral Health Business in a statement.
Like many virtual behavioral health providers, Talkspace has watched business boom amid the coronavirus, which has worsened the nation’s mental health while also making it harder for people to receive in-person treatment.
In March, for example, user volume was up 65% year-over-year and B2B inquiries were up 150%, a spokesperson told BHB at the time. Plus, since 2019, Talkspace’s direct-to-consumer user base has increased from 20,000 to 28,000, while its health plan-covered population has grown from 2 million to 39 million people.
For 2021, that trend is expected to continue, with the company projecting a net revenue of $125 million, up about 69% from 2020, according to a press release announcing the news.
Talkspace’s $1.4 billion merger with HEIC is expected to close around the end of Q1 2020 and provide the company with $250 million in cash for growth capital. After the deal is complete, Talkspace will trade on the NASDAQ under the ticker symbol TALK.
Talkspace declined the opportunity to comment for this story.