When Sherry Rais, CEO and co-founder of insurance plan provider Enthea, began her career in the psychedelic-assisted therapy space, she said many couldn’t fully grasp its importance.
“There have been a lot of people who didn’t understand the work I was doing and kind of had this mentality of ‘Oh no, Sherry’s into drugs now,’” Rais said in an interview, after Enthea announced it raised a $2 million seed round Tuesday.
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But the use of psychedelics as a form of treatment is now becoming more accepted. Ketamine is a generic FDA approved drug for several mental health conditions, including major depressive disorder, bipolar disorder and PTSD. MDMA and psilocybin-assisted therapies are in the process of receiving approval. The benefits of psychedelic treatment have even been featured in documentaries, including How to Change Your Mind on Netflix.
Despite ketamine being approved for treatment, it is not covered by insurance. That is where Enthea is stepping in, Rais said. As a benefit plan administrator, the startup works with self-insured employers to provide insurance coverage for psychedelic therapy, and gives access to its network of providers. Enthea is currently only able to provide coverage for ketamine-assisted therapy, but hopes to offer MDMA and psilocybin when they become approved. The company aims to provide employees with safe access to these medicines through a credentialed provider, without them having to worry about cost, Rais said.
With the money it just raised, Enthea is planning a nationwide rollout. The funding round was led by Tabula Rasa Ventures and included participation from Mystic Ventures.
“The advantages of these health benefits to both employees and employers can be immense,” said Maria Velkova, managing partner of Tabula Rasa Ventures, which invests in the psychedelics market, in an email.
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She added that after physically surviving a pandemic, employees are looking for mental health support from employers. This would improve employee retention and support a healthier workforce.
With the seed funding, the company plans to roll out its insurance plan and provider network for employers in 40 cities and sign on 100 clients by the end of 2023. Earlier this year, Enthea announced its first customer: soap company Dr. Bronner’s. In 2023, it will begin working with Daybreaker, Tushy and Guinn Partners. The company currently has just one provider, but is bringing on six new providers in 2023. It also has letters-of-interest from 90 providers in 26 states.
Enthea was originally founded as a nonprofit organization in 2019, but had difficulty raising funds, Rais said. After running out of money, the company decided to restructure as a for-profit in August. Once it made this change, Enthea had a much easier time securing its needed funds, despite the current economic climate, she said.
There is a need for these kinds of treatment as 21 million American adults suffer from major depressive disorder, 12 million suffer from PTSD and 20 million suffer from substance use disorder. Research shows that ketamine-assisted therapy can help this crisis. One study on ketamine found it significantly improved depression and anxiety, and another study found it helped treat substance use.
Because of this need, Rais said requests from companies have been rolling in. Enthea has been able to gain about 35 letters-of-intent from companies, she claimed.
“I can’t even look or go through my entire inbox anymore,” Rais said. “That’s how I think all of my colleagues feel … I think this is the most perfect time to be doing this. Even if we had been in this position two years ago, I think it would have been very different because of the psychedelic climate and openness to psychedelics.”
Enthea’s ultimate goal is to make these treatments more accepted and more accessible, Rais said. In five years, she hopes the company can provide coverage to 5 million people in all 50 states.
“What’s the big picture goal? It would be, one, that these medicines aren’t feared,” she stated. “There’s a lot of education that needs to happen, and I think Enthea plays a big role in that education by providing access to these medicines.”
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