Behavioral health benefits company Spring Health announced Thursday that it has raised $190 million in a Series C round led by Swedish growth investment firm Kinnevik.
The round included a number of participants, including several existing investors, as well as the Guardian Life Insurance Company of America, which is a new investor.
Spring Health reported that the latest round — which involved equity and debt financing — brought the amount invested to date in the company to $300 million, raising its total valuation to $2 billion.
Founded in 2016, New York-based Spring Health partners with workplaces to offer employees behavioral health resources like therapy, coaching, mindfulness and medications. Fully vetted therapists and physicians are available through Spring Health’s network, with the company using artificial intelligence to assess and match users to an appropriate level of care.
Spring Health’s revenue has also grown sixfold over the past year, according to the company. Spring Health President Adam Chekroud believes that growth can continue, given demand in the market and customer satisfaction with the company’s services.
“Lots of companies are searching for solutions [for their workers], and they see that we’ve done a good job with our existing book of business,” he told Behavioral Health Business.
Spring Health has partnerships with over 150 companies — ranging from startups to Fortune 500 businesses — and over 2 million covered lives, according to the company.
“We have so much demand from employers, and increasingly from health plans, that it’s really important that we focus on continuing to deliver strong results for those customers,” Chekroud said.
Spring Health is part of an ever-rising market for virtual health care services, which is estimated to be worth nearly $142 billion, according to research firm Global Market Insights.
Along with virtual providers like Ginger, Modern Health and Lyra Health, Spring Health is also in a class of digital behavioral health companies that in total raised nearly $2 billion in 2020, according to business database CB Insights. At the current pace, equity funding of virtual mental health companies will climb to almost $3 billion by the end of this year.
Several companies have reached a valuation of at least $1 billion in 2021 with continued investment into the digital behavioral health space. Among those companies, Ginger made news last month when it merged with fellow behavioral health platform Headspace, pushing the combined company’s valuation upwards of $3 billion.
When it comes to differentiating themselves from their digital counterparts, Chekroud cited Spring Health’s proprietary technology for matching users with particular services.
“The result is that people can get better faster,” he said. “They can figure out what treatment is most likely to help them get better amongst all of the different treatments that are out there.”
Spring Health intends to use the money raised from the Series C round to ramp up offerings to members and their families. Those specific offerings include relationship counseling, adult therapy and pediatric mental healthcare, along with coaching and self-guided exercises for parents.
Spring Health is also partnering with Guardian Life to develop behavioral health solutions for the insurer’s beneficiaries. Chekroud said that Guardian Life is the first of several insurers Spring Health plans to team up with for such solutions across the digital platform.
In terms of future growth prospects, Spring Health intends to concentrate on adding new members through their employers but hasn’t ruled out the possibility of going directly to prospective customers.
“In the long run, there’s the grand vision to extend the offering to everybody so that it’s not really constrained by things like employment status, or what company you work for, or what health plan you have,” Chekroud said.
Spring Health’s future growth plans also lie outside the United States, with the goal to expand existing pilot programs over the next six months to reach “parity” with the U.S. platform, Chekroud stated.
As part of the funding round, Spring Health announced that Christian Scherrer is joining the company’s board of directors.
Scherrer is a London-based investment manager for Kinnevik and also serves on the board of digital addiction treatment platform Quit Genius, which raised $64 million in a July Series B round.