Talkspace, a growth stage behavioral health business focused on texting interaction, has closed a $31 million Series C round. The company will use the funding to expand its business model beyond the direct-to-consumer market and add more therapists, Cofounder and CEO Oren Frank said in a phone interview.
The business views its mobile and web-based service not only as a way to make therapy more convenient and approachable for people with undiagnosed conditions such as depression or PTSD but also more compelling for those who would prefer text messaging to a video chat or in-person experience. It does offer therapist interaction by phone and video as an option, though.
Qumra Capital, a growth stage investor based in Israel, led the Series C round with participation from Norwest Venture Partners, Spark Capital, SoftBank, Compound Ventures and FirstTime. Talkspace has raised $60 million to date.
Talkspace added a business-to-business model seven to eight months ago, Frank said. Although 90 percent of its revenue currently comes from consumers, it is hoping to change that in the coming months. Currently, users are charged $128 per month to check in with a therapist once per day or $156 per month if they check in twice a day.
Since its Series B round last year the company has worked on the development of its back-end platform and added outcome measures as a way of improving how therapists treat their patients and monitoring their therapists’ performance, Frank said. In the past year Once it establishes a baseline of a user’s condition through an initial consult, Talkspace therapists monitor patients and do an assessment every 23 days. One of the company’s goals is to analyze their data so that they can ensure they match patients with therapists that have built a strong track record of successfully treating their condition.
Frank said in the next year the business has set its sights on international expansion. It plans to offer its text-based therapy in other countries in Africa, Europe, and Latin America through joint ventures. It service would be delivered through local providers in those countries.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Investment in behavioral health startups this year is poised to outstrip last year’s figures. In 2016, venture capital investment accounted for $168 million across 25 deals, according to CB Insights. As of August 7, investment in this space was up to $55 million for 19 deals. Although much of this reflects early stage investment, Talkspace is one of the more mature businesses in this subsector. SilverCloud Health, Somatix and Regroup Therapy are a few of the companies that have closed funding rounds this year.
Photo: Andrzej Wojcicki, Getty Images
