Headway, a startup that connects patients to in-network therapists, announced the close of a $125 million Series C funding round on Thursday.
The financing round brings the New York-based company’s total funding amount to $225 million and its valuation to $1 billion, reaching unicorn status. The Series C round was led by Spark Capital with participation from Thrive Capital, Accel, Andreessen Horowitz and Health Care Service Corporation.
The startup, founded in 2017, seeks to increase Americans’ access to mental health care. It’s been well-documented that the country is embroiled in a growing mental health crisis, yet so many people who need care don’t receive it.
“I experienced firsthand the challenges of being unable to find a therapist who accepted my health insurance. Once I did, I couldn’t get an appointment when I needed it most. I quickly learned that not only was this not unique to me, it was something millions of people faced,” said Headway CEO Andrew Adams.
When he and his founding team were creating Headway, Adams quickly learned about the immense hurdles that mental health providers face when trying to work with insurance companies to offer in-network care to patients. While many people suggest that addressing the the nation’s mental health crisis is a matter of increasing the net supply of providers, he argued that this is not the core issue.
In his view, the real issue is the lack of access to mental health providers who already deliver great care but face barriers to accepting insurance.
Taking insurance is quite administratively burdensome for therapists, so many of them don’t. Adams pointed out that most therapists “are mom and pop shops” who don’t have and can’t afford to hire administrative staff to manage various tasks like credentialing, billing, completing insurance paperwork, submitting claims and keeping up with compliance requirements.
“That’s exactly the challenge we’re solving for. Headway is building a new mental health care system that every person can access by making it easy for therapists to take insurance and scale their practice,” he explained. “Today, we’re the nation’s largest network of 26,000 therapists and psychiatrists who actively take insurance.”
Headway’s technology “takes care of all of the pains” of getting enrolled with an insurance company, from looking at benefits to filing claims to managing revenue cycle, Adams declared. Mental health providers see patients and get paid while Headway “deals with all of the work behind the scenes,” he said.
To get connected with an in-network provider, patients can visit Headway’s website and enter their location and insurance information. They can search for both in-person and virtual care, and they can filter their provider search results based on their race, ethnicity, language and sexuality. On average, people attend their first appointment five days after they book, Adams pointed out.
In addition to serving providers and patients, Headway also benefits payers, he declared.
“Because we have an integrated technology platform, the payer is able to better understand if their members are getting care or not. They also get comfort that their members are getting healthier. This week, BCBS Texas reported that they saw a 5% reduction in inpatient acute behavioral health admissions since 2021, which the health plan correlates with Headway’s ability to connect members to outpatient behavioral health care within 48 hours,” Adams explained.
Headway’s platform is free to use for patients and providers. The company operates by taking a small percentage from the premium paid by health plans.
When asked how Headway differentiates itself from other platforms that connect people with in-network providers like Zocdoc, Adams said that his startup is the largest network of providers taking insurance.
“Headway is the best option for payers looking to expand mental health access for their members. It’s the best option for providers who are eager for competitive rates and support to grow a successful practice. And it’s the best option for patients looking for a diverse, high-quality group of therapists to choose from to get the best possible care,” he declared.
The company currently operates in 44 states and Washington, D.C. It will be in all 50 states by the end of the year, Adams said.
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