Mental health startup Lantern is folding its commercial operations effective August 1, TechCrunch reported. The company is laying off the majority of its staff, or about 25 people. A group of team members will focus on what’s next for Lantern.
The San Francisco-based startup’s app allowed users to complete a self-evaluation assessment. It then provided daily exercises, which helped people pinpoint and restructure negative thoughts.
The tool, which costs about $50 per month, will still be available for paid consumers through the end of 2018. The startup also offered the services of coaches, or experienced behavioral change professionals, to help guide patients through the programs. These coaches won’t be available to users anymore.
In 2016, the startup raised a $17 million Series A round led by University of Pittsburgh Medical Center, with participation from previous Lantern investors like Mayfield Fund, SoftTech Venture Capital and Stanford University.
A UPMC spokeswoman sent the following statement via email: “Although we are disappointed in Lantern’s closing, UPMC intends to continue developing this technology to support our own patients and their mental health needs. Alejandro [Foung, Lantern’s CEO] and his team have highlighted the critical role that technology can play in improving access to effective behavioral health interventions.”
According to TechCrunch, Lantern decided to say goodbye after a few acquisition deals fell through. Foung told the publication that his startup needed more customers to if it were to survive.
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.
Though the company’s plan was to sell its product to payers, it initially sold directly to insurers and through employers.
A post on the company’s website elaborates:
We’ve spent the past six years working hard to build a product that is engaging for users, reduces symptoms and has a sustainable business model. After some trial and error in the direct to consumer and employer spaces, we ultimately pursued a strategy of alignment with traditional healthcare insurance companies. Healthcare moves very slowly and we made the mistake of misjudging the time it would take to achieve sustainable revenue through this approach.
The post also gives a bit of insight as to what might be next. “A group of us here at Lantern believe we can take the learnings, technology and skills we attained over the past six years and address this problem without a need to focus on profits and exit strategies,” it reads.
Via email, Foung said he doesn’t have any news on future plans, but hopes to be able to share something more substantive in a few weeks.
Lantern isn’t the only company to fold its operations lately. CareSync, a Florida-based care coordination business focused on Medicare patients, discontinued operations as of June 21. A recording on the company’s main contact number noted CareSync was shut down despite efforts to raise additional capital or find a strategic partner to enable the company to continue its operations.
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