Patient-matching platform Headway Health has announced a $125 million Series C funding round.
The round, led by Spark Capital with participation from Accel, Thrive Capital and Andreessen Horowitz, brings the company’s total valuation to more than $1 billion.
The New York-based company plans to use the new capital to build out its technology and tools. It also has plans to expand into all 50 states and the District of Columbia. It will also be creating products to help providers deliver care across state lines.
As part of the deal, Will Reed, Spark’s general partner, will join the Headway board of directors.
Founded in 2019, Headway is a digital platform that helps patients connect to mental health providers in their insurance network. The company also helps behavioral health providers by supplying clinics with a suite of free technology products to help with administrative burdens.
Its business model relies on the commissions from its payer partners. It works with several national payers, including Aetna, Anthem Blue Cross and Blue Shield, United, Cigna, Oscar and Oxford.
“I founded Headway after I couldn’t find a therapist who accepted my insurance — a problem millions of Americans face each year. Headway is addressing that problem by making it easier for providers to see patients in-network and help more Americans get the care they need,” Andrew Adams, founder and CEO of Headway, said in a statement. “This funding will enable that nationwide expansion, and allow us to further invest in the partnerships and tools that will help providers grow their practice.”
The company closed a $70 million Series B funding round in 2021 and a $26 million Series A funding round.
Earlier this year, reports circulated that the company had raised over $100 million in investments.
While Headway has made great strides in raising capital, digital behavioral health funding has dried up somewhat since its peak in 2021.
Behavioral health tech companies raked in a total of $900 million in the first three quarters of the year, according to a new report by Rock Health. While behavioral health was the best-funded digital health segment, it is tracking significantly lower than in previous years.
Digital behavioral health funding peaked in 2021 with investors pouring $4.9 billion into the clinical indication. That dropped to $2.1 billion in 2022.
Still, some digital behavioral health companies have raised capital this year. For example, earlier this week hybrid autism provider Cortica announced a $40 million Series C funding round. In June, senior-focused mental health platform Author Health raised $115 million in a debut funding round.