Digital substance use disorder provider Affect Therapeutics has raised $16 million in Series A funding.
ARTIS Ventures led the round with participation from AlleyCorp, CityLight, LifeArc Ventures, Samsung Next and What If Ventures. The company’s total raise comes to roughly $23 million, according to Crunchbase.
Founded in 2020, Affect Therapeutics provides virtual substance use disorder (SUD) treatment for alcohol, marijuana, cocaine, methamphetamines and prescription stimulants, such as Adderall. The Virginia-based startup uses financial incentives to help its clients maintain sobriety. These rewards can be given for engagements and negative drug and alcohol screens.
Clients can also access counseling and doctors appointments on the company’s app and get medication-assisted treatment prescriptions. The service also includes virtual group therapy and periodic screenings.
The company said it plans to use the infusion of capital to expand nationally, grow its programs and build out its app.
“Affect’s approach uses science-backed studies that have shown the power to change behavior, which is proving to be life-changing for patients and their families,” Stuart Peterson, founder and managing partner at ARTIS Ventures, said in a statement. “Early results are remarkably impressive, with treatment initiation and engagement at more than 2-3X national benchmarks. With Affect, we have a massive opportunity to drive impact around addiction and recovery at scale.”
The provider has outpatient licenses in 20 states but is planning to expand to the majority of the U.S. by the end of the year.
Despite this funding news, digital health funding is down for the second year in a row, according to a recent Rock Health Report. Health tech companies only raised $6.1 billion in the first half of 2023, less than half of 2022’s $15.3 billion total and less than a quarter of the $29.1 billion raised in 2021.
Rewards for behavioral change, often called contingency management, is a tool that many SUD providers are exploring. And regulatory changes could help propel that movement.
At the beginning of 2022, California became the first state to cover contingency management via Medicaid through a federal clearance for a special waiver.
There is also emerging research about the benefits of contingency management. A study published in the Journal of Consulting and Clinical Psychology found that patients receiving contingency management in their treatment plan were 22% more likely to be abstinent at 24 weeks after treatment than those without.