Digital mental health company Modern Health is looking to differentiate itself in the increasingly competitive B2B sector.
It plans to do this by connecting mental health interventions to the rest of a person’s care, Modern Health CEO and founder Alyson Watson told BHB.
“I think one of the biggest opportunities that none of us are really solving for or cracking the nut yet is around how it ties back to physical health,” Watson said. “How ultimately can we show the connection between mind and body? No one has been able to do that successfully and I think that’s the next chapter of … where mental health companies will go.”
Point solutions in the digital mental health space have been forced to adapt to crowding in the market. One such provider, the digital addiction treatment platform Quit Genius, has made a 100% at-risk payment model its standard model to stand out.
But in terms of platform offerings, digital mental health companies need to do more than establish connections to providers via telehealth.
“While telemedicine plays a role in what we do, just telemedicine on its own doesn’t have nearly as big of an impact or opportunity as solving mental health specifically,” Watson said. “But how does that tie back to physical health and comorbidities? How does that tie back to heart disease and cancer and diabetes?”
Based in San Francisco, Modern Health bills itself as a one-stop shop for mental health benefits. Watson said that mental health benefits are becoming the “fourth pillar of benefits” alongside medical, dental and vision benefits.
The coronavirus pandemic simultaneously revealed and worsened the already-shaky state of mental health in the U.S. In turn, it inspired a tsunami of investment into behavioral health generally but digital mental health specifically. Investment into digital mental health companies tracked by Rock Health totaled $5.1 billion in 2021.
Modern Health has raised $172 million in funding since its launch in 2017 and reached a unicorn in 2021. In December 2020, the company raised $51 million of Series C funding and turned around $74 million in Series D funding in February. At Series D, it had a valuation of $1.17 billion.
CB Insights reported that Modern Health was among the most highly valued startups in digital mental health.
Modern Health presently shows its individual members how improvements in their mental health can lead to improvements in physical health. The company’s development roadmap includes other efforts that make the connection between mental and physical health. It’s exploring products that help with coping with physical health issues.
Other things on the table include coaching services for other aspects of health such as nutrition, Watson gave as an example.
The high demand for services and lack of behavioral health providers means there are still opportunities for new digital mental health companies.
“I think that there will be a number of really big players in this space — there’s a couple of us that are well funded and continuing to compete and grow,” Watson said. “But the relative market share that we all have … is negligible. We’re at like the first inning of where this thing can go.”
She said that her focus is on the company’s mission to expand access to care on its own and “be good fiduciaries.” When it comes to acquisitions, Watson said that being acquired is “certainly not a necessity for us to be successful and going after our mission.”
On the other hand, the company is presently focused on building the tools and programs that it needs to address the connection between mental health and physical health.
“It’s hard; It requires a pretty big tech team and pretty big investments on our end,” Watson said. “So we’ve been in a position to continue to make these investments and build internally. That’s not to say we’re not opposed to potential acquisitions.”
Modern Health would likely test drive potential acquisitions through partnerships with other organizations before addressing a merger deal.
Part of the build internally strategy comes from the desire to create high-quality experiences across all services. This is vital to the one-stop-shop approach to Modern Health.
“We don’t want someone to have a great experience with one-on-one therapy but a super crappy experience for adolescents care, as an example,” Watson said. “We’ve really been prioritizing investment in building internally. … There will be examples where we will partner and then potentially consolidate as a result.”
Companies featured in this article:
