Expect Accelerated Growth From Two Chairs After $72M Funding Round

The San Francisco-based hybrid mental health startup Two Chairs has raised $72 million in a Series C equity and debt funding round.

Led by the firm Amplo, the funding round also included Fifth Down Capital and other unspecified investors. Other investors that participated in the previous funding round included Goldcrest and Maveron. In total, the company has raised $103 million since its founding in 2017.

“Given the growth that we project over the next several years, we’re going to start to have many thousands of therapists on our team,” Alex Katz, CEO and a co-founder, told Behavioral Health Business in an interview. “To maintain a very high bar for quality at that level of scale and complexity requires a great clinical team and a great culture.


“It also requires the right investment in data and technology, so that you can really assure that the quality is where it should be.”

Today, Two Chairs operates seven clinics in three states: three in the San Francisco Bay area, two in Los Angeles and one each in Seattle and Miami.

The company provides outpatient mental health care in both clinics and virtual settings. It does so on an in-network basis with health plans. For example, Two Chairs announced a national contract with the health plan company Aetna to aid its expansion in Florida, its newest state market.


It also announced an expansion of its leadership team about a year ago and the development of group therapy and care navigation services in August 2023.

How will Two Chairs use the new funding? 

Two Chairs will use the new cash to open new clinics at an accelerated rate and make key investments in its technology stack, Katz said. The company has purposefully taken a measured approach to expansion, opting for market density rather than a thinner presence in multiple markets.

This is the approach that Two Chairs will take as it expands in the future. Katz declined to talk specifics but said to expect new markets announced within the year and that the expansion rate will accelerate.

Two Chairs presently employs about 500 clinicians. The company has seen revenue — which Katz points out closely parallels patient and clinician headcount — grow by eight-times in the last 36 months.

“We’ve been able to build these large, concentrated local clinical teams that reflect the communities they serve,” Katz said. “We’re building great local clinical culture and that’s really helped make sure that quality keeps up as we’re growing.”

The company’s key technology investment will be improving the Two Chairs patient-providing matching software, called the “matchmaking platform,” and its proprietary measurement-based care platform.

Several companies seek to use tech to better match clinicians and patients in the hope of better facilitating therapeutic alliances. The relationship between patient and clinician is widely seen as the best predictor of good care outcomes. Two Chairs differentiates its approach by incorporating a clinician in that process.

On top of assessing 300 data points, patients have a 45-minute session with a clinician that has a say in which clinician will pair well with which patient.

“Our contention is this: that meeting is such a critical source of insight because it really takes a therapist in the room with their judgment and expert intuition to have that conversation in the right way,” Katz said.

The challenges to overcome

Katz repeatedly pointed the conversation back to growing with care quality in mind. While he didn’t name specific companies, care quality has been a long-running concern as the coronavirus revealed the opportunity for mass implementation of telehealth and national care platforms. That was an opportunity that venture capital firms leaped at, pouring billions into virtual behavioral health services.

The glut of providers on the market has led to a run on therapists, and many have found the employment experience at many digitally focused or digital-only startups lacking. This has led to therapists leading movements meant to extract greater transparency about their practices and unionization efforts.

Katz ties company culture, especially a culture focused on care quality, to successfully finding and retaining the therapist the company needs to deliver services.

“I think there’s a crisis in mental health for patients. But there’s just as much of a crisis on the therapist side. It’s a profession rife with burnout,” Katz said. “A big enabler of our success over the last three years, why we’ve been able to 8X the size or the organization in the face of a lot of competitive culture, is that focus on the therapist and becoming a place that therapists love working.”

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