The lack of access to mental health services in the United States is a root cause that’s deepening the mental health crisis the country presently faces. Ninety-six million Americans have had to wait for more than a week for mental health treatments. 25% of Americans report having to choose between mental health services and daily necessities. Many therapists forgo accepting insurance because of the administrative burden to accept insurance and ongoing claims processing, creating another barrier for access and affordability. Headway is a national network of therapists that that leverages software to empower therapists to onboard their practices into insurance networks, making mental healthcare services, covered by insurance, accessible for patients. Patients can quickly find a provider that accepts their insurance, matched to their preferences on Headway’s site with a full understanding of what it will cost. Therapists are able to expand their practice base while offloading scheduling and billing.
AlleyWatch caught up with CEO and Cofounder Andrew Adams to learn more about Headway’s mission of making mental healthcare accessible for the first time at scale, the company’s expansion plans, the latest round of funding, and much, much more.
Who were your investors and how much did you raise?
Headway has secured a $70M Series B round of funding led by Andreessen Horowitz, with participation from Thrive, GV, and Accel, the investment comes just six months after Headway’s Series A. The new capital brings total funding to date to $103M and gives Headway a new valuation of $750M
Tell us about the product or service that Headway offers.
Headway is building a new mental healthcare system, rewired for access and affordability, through software. Despite one in four people having a treatable mental health condition, the overwhelming majority don’t get the care they need because of high costs. Through its software-enabled network, Headway connects patients with therapists who accept insurance, helping providers to expand their practices, and individuals to finally find a therapist they can afford.
What inspired the start of Headway?
As part of moving to NYC in 2015, I tried to find a therapist and failed. I couldn’t find a therapist that I could afford because 70% of therapists don’t accept insurance.
The reality is that therapists would accept insurance if it weren’t so hard, but insurance wasn’t built for therapists. It was built for huge hospital systems who employ entire departments to deal with the administrative burden of insurance. As individual practitioners, therapists don’t have the bandwidth to support taking insurance.
Headway is solving this problem by building the first software-enabled national network of therapists. Because Headway’s free software handles all the work to accept insurance, two out of three providers that you’ll find on our platform don’t accept insurance anywhere else. Headway also enables anyone to find a provider who accepts their specific insurance plan. Put together, Headway is helping tens of thousands of patients who, like me in 2015, would otherwise be unable to find affordable mental healthcare.
How is Headway different?
Headway is making quality mental healthcare accessible and affordable across the United States. The demand for affordable mental healthcare is burgeoning, yet cost remains the biggest barrier to access. Headway is tackling the challenge by providing free software that seamlessly connects patients, therapists, and insurance companies. Nearly 70% of therapists do not accept insurance because of the administrative burden for solo practitioners, who comprise 85% of the mental healthcare market today. The time commitment required for processing claims and paperwork reduces the number of patients they can see and for the most part, reimbursement rates have yet to reflect the importance of behavioral care on one’s physical health. This drives up the cost of therapy, making it inaccessible to many Americans desperately seeking support.
Headway has built the unique infrastructure to connect all parties:
- Patients are at the core of Headway’s mission. Through Headway, prospective patients can search for a therapist who matches their preferences and book directly on Headway’s website, all while having a clear view into what they’ll owe with their in-network insurance plan. From there, the Headway team supports patients with questions along the way.
- Therapists are empowered to grow their private practice and focus fully on their patients instead of paperwork. Headway handles the full process to join an insurance panel, and its free software offers full claim management support, payments, and scheduling. With Headway, therapists no longer need to turn patients away because they do not accept their insurance.
- Insurance companies partner with Headway to unlock behavioral health access and quality for their patient networks. Patients can book an appointment directly with a therapist on Headway within five days, compared to the 30-day average with an insurance directory.
What market does Headway target and how big is it?
Headway’s market is the one in four people who have a treatable mental health condition. Roughly 85 million Americans. The overwhelming majority of this group don’t get the care they need because of high costs but Headway aims to change that: we offer free software to efficiently connect patients to therapists and therapists to insurance companies. This empowers our network of therapists to offer affordable mental healthcare to the 1 in 4 Americans in need of mental healthcare.
What’s your business model?
Insurance companies partner with Headway to unlock behavioral health access and quality for their patient networks. Patients can book an appointment directly with a therapist who accepts their insurance on Headway with no additional charge.
How has COVID-19 impacted the business?
COVID-19 has disproportionately affected the mental health of those least able to afford care, exemplifying the urgent need for a new mental healthcare system in the US. The shift to predominantly virtual care makes it possible for therapists to expand their practice to more patients and we want to ensure those slots are accessible by those in need. We’ve also seen an uptick in therapists starting their own full-time private practice in response to the rising demand and flexibility introduced with the pandemic, eliminating the need for historical requirements such as office space.
COVID-19 has disproportionately affected the mental health of those least able to afford care, exemplifying the urgent need for a new mental healthcare system in the US. The shift to predominantly virtual care makes it possible for therapists to expand their practice to more patients and we want to ensure those slots are accessible by those in need. We’ve also seen an uptick in therapists starting their own full-time private practice in response to the rising demand and flexibility introduced with the pandemic, eliminating the need for historical requirements such as office space.
What was the funding process like?
On the heels of our Series A this past October, this investment reflects the burgeoning demand for affordable mental healthcare, and the confidence our investors have in our approach to deliver access to quality care at scale. It has been a pleasure to work with Andreessen Horowitz, Thrive, GV and Accel on this round. In fact, Headway recently added Cherry Miao, a former Partner at Accel, Headway’s lead seed investor, to its executive team as Head of Finance & Data.
What are the biggest challenges that you faced while raising capital?
Over the past year, we have seen a vast amount of insurtech, healthtech, and digital health startups enter the space. We wanted to make sure we had the opportunity to tell our story to the right audience. Headway’s unique offerings and commitment to delivering access to quality care at scale have enabled us to differentiate ourselves in the market and connect with firms who share our values and believe in our mission.
What factors about your business led your investors to write the check?
Our impressive growth. Headway only started in New York in April 2019 and has moved swiftly to:
- Grow net revenue by 9X;
- Enable 3,000+ therapists, psychologists and psychiatrists to accept insurance;
- Add more than 2,000 patients to the Headway platform each month to find great therapists who accept their insurance;
- Facilitate 300,000+ therapy appointments;
- Scale our team to 75+ employees;
- Expand our reach to 10 additional states: New Jersey, Florida, North Carolina, Texas, Georgia, Michigan, Virginia, Washington, Illinois and Colorado.
What are the milestones you plan to achieve in the next six months?
Headway’s focus over the next six months will be to begin expanding our team to more than 300 people as we work towards the goal of scaling to full national coverage.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Make sure you have a clear vision. At Headway we have always been focused on building the first national network of therapists who accept insurance. We still have not spent a dime of the $26M series A we raised in the summer yet we’ve expanded our offerings to ten additional states. Our unified vision and passionate team have enabled us to make our dream a reality.
Where do you see the company going now over the near term?
While I’m proud of this fundraise as a signal from folks like a16z in who we are, ultimately it’s a conviction of where we’re going to go. We are not just in New York, we are now national. We are one step closing to providing affordable mental healthcare access to all Americans, not just some.
What’s your favorite outdoor dining restaurant in NYC
Petee’s Pie Company!
