The behavioral health market is projected to soar, reaching $240B by 2026, and for far too long employers have focused on keeping their employees physically healthy but ignoring mental health conditions. Spring Health has emerged as a pioneer, providing comprehensive employee mental health benefit solutions. The company’s proprietary assessment, “Precision Mental Healthcare”, understands the nuances and symptoms of conditions a person may be experiencing and then matches them to a tailored care plan for treatment. Each member is connected to a Care Navigator that guides them through care options, the actual scheduling of treatments, and connects them with domain experts when necessary. During the pandemic, a particularly tolling experience for the masses, the business has grown 5X.
AlleyWatch caught up with CEO and Cofounder April Koh to learn more about how Spring Health breaks down the barriers for delivering mental healthcare to employees, the company’s future plans, and latest round of funding, which brings the total funding raised to $106M since its founding in 2016.
Who were your investors and how much did you raise?
We raised a $76M Series B led by worldwide investment firm Tiger Global. GingerBread Capital, and Operator Partners, the newly-formed fund by Nat Turner and Zach Weinberg, the cofounders of Flatiron Health.
Existing investors Northzone, Rethink Impact, William K. Warren Foundation, Work-Bench, SemperVirens, Able Partners, and True Capital also participated. New individual investors in the Series B round also include six-time NBA all-star and NBA champion Kyle Lowry of the Toronto Raptors, and two-time WNBA all-star and 2018 WNBA MVP Breanna Stewart of the Seattle Storm.
Tell us about the product or service that Spring Health offers.
At Spring Health, we help employers modernize their behavioral health benefits with the most effective, comprehensive solution for employee mental wellbeing. Our offering functions as a single front door to any type of care – from digital exercises, to EAP services, to coaching, therapy, or medication.
We use a proprietary assessment and machine-learning technology to understand all of the conditions a person may be experiencing and use those results to match them to a care plan personalized to their needs. Each member has access to a Care Navigator to help guide them through their options, assist in booking appointments with therapists, and connect them to domain experts across work-life, legal, or financial services.
This innovative, personalized approach to care, paired with a seamless, high-touch member experience makes Spring Health the most holistic, effective behavioral health benefit for employers.
What inspired the start of Spring Health?
I’ve personally gone through my own mental health journey. I know firsthand just how broken the mental healthcare system is. I also watched my best friend and college roommate go through a terrible experience with her eating disorder: she tried four providers, seven antidepressants, and I watched her go in and out of the hospital. Her journey opened my eyes to the trial-and-error that plagues mental healthcare today.
My cofounder Adam and I met at Yale. He had published a landmark paper in one of the world’s top medical journals describing the first machine-learning model proven to outperform psychiatrists in predicting treatment outcomes in depression. We shared the same vision of bringing this technology to real lives and using data to transform mental healthcare. We both dreamt of eliminating guessing in care and building a future where we could guarantee the fastest path to recovery possible for every person. I’m really lucky that he responded to my cold email and agreed to go to coffee with me four years ago.
How is Spring Health different?
Every other solution is focused on faster, sometimes even instant, access to something — faster access to therapy, or meditation, or even antidepressants.
At Spring Health, we believe that faster access is meaningless if the care doesn’t actually work for you. We are the only solution that is focused on going beyond faster access to faster recovery by delivering the right care at the right time. We are the only solution that uses Precision Mental Healthcare — technology that is clinically proven to outperform providers in matching people with the right care plan for them.
We believe that your mental healthcare should be a personalized experience for each person — just like your Netflix, or Amazon, or your Twitter feed. Every person has a unique, personal mental health journey, and their experience in Spring Health should reflect that.
We’re not just a therapy scheduling tool or a meditation app. We take a step back, zoom out, and ask questions like, “Is therapy the right fit for you? If so, what kind of therapy with what kind of provider best suits your needs?” We strive to deeply understand where you are in your mental health journey and which option would be best for you.
By matching each person with the right care from the start, we’re able to deliver recovery in half the time and in half the number of sessions on average when compared to our competitors.
What market does Spring Health target and how big is it?
The mental health market is massive. Just the employer mental healthcare market alone is a $20B dollar market, and it’s growing. As stigma continues to go away and suicide rates continue to climb at an alarming rate, more and more Fortune 500 companies are looking to more effectively support their employees’ mental health through new solutions.
What’s your business model?
We charge employers a subscription fee for our services. Employers often cover the full cost of therapy visits for their employees through Spring Health.
How has COVID-19 impacted the business?
The upheavals of 2020 including COVID-19, the presidential election, and attention brought to continuing racial injustice have led to more and more people experiencing anxiety, depression, and burnout. Leaders have come to understand just how vital employee mental well-being is to the success of their organizations.
Mental health already was a growing and urgent priority for employers pre-pandemic, but I do believe that COVID-19 factored powerfully into the fact that we 5x’ed this past year.
What was the funding process like?
We didn’t plan to raise this year, since we just closed our A in January — just a few months ago! We started getting a ton of inbound interest for an early Series B, so we ran a process, and the fundraise wrapped up very quickly.
We didn’t plan to raise this year, since we just closed our A in January — just a few months ago! We started getting a ton of inbound interest for an early Series B, so we ran a process, and the fundraise wrapped up very quickly.
Given our explosive growth this past year, there was a lot of interest from top tier funds. We chose Scott Shleifer and his team at Tiger Global, because we believe Tiger Global will be the best partners for Spring Health as we scale. Even before we signed Tiger Global’s term sheet, Scott had introduced us to at least twelve prospective customers. It’s clear that the Tiger Global network is extensive and very powerful.
What are the biggest challenges that you faced while raising capital?
Raising $76M completely virtually was definitely a unique challenge because you don’t get a perfect feel for a firm when your interactions are purely virtual.
I also was surprised by the sexism that still exists in venture capital. But only 5% of female founders raise Series B’s. I guess I shouldn’t be surprised by the sexism.
What factors about your business led your investors to write the check?
Our amazing team and our explosive growth. Also, we have happy customers who provided great, wonderful references.
What are the milestones you plan to achieve in the next six months?
Our first priority is scaling out the team. We are hiring in every function.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Do not fall prey to measuring your company’s success by how much you’ve raised and how many people you’ve hired. Capital efficiency and go-to-market efficiency are what’s most important. You are not a better company for raising hundreds of millions of dollars or for having hundreds of employees. Having less capital forces you to get more done with less. There’s frighteningly little focus on profit these days among startup founders.
You are not a better company for raising hundreds of millions of dollars or for having hundreds of employees. Having less capital forces you to get more done with less. There’s frighteningly little focus on profit these days among startup founders.
Build a fundamentally strong business with strong unit economics. Not having a ton of cash could be the best thing for you and your team right now.
Where do you see the company going now over the near term?
Becoming the leading provider of mental health benefits for employers.
What’s your favorite outdoor dining restaurant in NYC
I live in Greenpoint, Brooklyn right next to Naked Dog. It was awesome pre-COVID and it’s still awesome during COVID.
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