NeuroFlow, a Philadelphia-based medtech startup streamlining delivery of mental health services, has raised $25 million in a growth funding round led by SEMCAP, a private equity firm cofounded by the buccaneering 1990s-era Internet investor, Walter “Buck” Buckley.
Founded by CEO Christopher Molaro and a bioengineer, Adam Pardes, in 2017, NeuroFlow triages people with behavioral health needs to identify the right level of care. It has so far raised $57 million.
“NeuroFlow is different because we embrace collaboration with others in the space, like telehealth partners, to get people to the most efficient and effective care possible,” said NeuroFlow CEO Chris Molaro, an Iraq war veteran with first-hand understanding of mental trauma. “There is a significant supply and demand imbalance for behavioral health, and no efficient or scalable way to standardize the way people are identified, assessed, and referred. That’s why we exist,” he added.
In recent years, Buckley — famous for establishing the Internet Capital Group (later known as ICG and Actua Corp.) at the height of the first dotcom boom — has focused on food and nutrition, healthcare and education with his SEMCAP.
“NeuroFlow fits perfectly into SEMCAP Health’s strategy of partnering with category leaders in their critical growth equity phase and amplifying their ability to improve healthcare quality, affordability, experience and health equity,” said Mark Miller, managing director of SEMCAP’s health unit.
Molaro’s Lighbulb Moment
Chris Molaro began to focus on mental health issues after a fellow soldier who had served in Iraq took his own life. He blamed that death on a “big leadership failure” — the inability of the mental healthcare system to track a person at risk and provide the necessary support. What eventually led to NeuroFlow were two other things — an association with cofounder Adam Pardes, a doctoral bioengineering scholar, when in business school and an innovative psychiatry professor.
“That’s when the light bulb went on and said, “I think that there’s something here,” Molaro told Smart Business Dealmakers in an interview. “No one is really addressing behavioral health today.”
Reckoning that only a third of about 40 million Americans who suffer anxiety disorders receive mental healthcare, NeuroFlow has built a tech platform that integrates consumer engagement with care management. Its flagship product, EngageBH, integrates with commercially available wearable devices, allowing clinicians to access real-time data and, say, measure stress levels, etc. and provide guidance. In a recent study, NeuroFlow also established that technology-enabled behavioral health programs decrease use of emergency departments and highlight the importance of measurement-based care. The company supports 15 million individuals in all 50 states.
Morano’s startup won the Wharton business school’s Startup Challenge Innovation Award in 2017, and its founders spent the summer in development at its entrepreneurship accelerator, VIP-X. NeuroFlow also partnered with professor Michael Platt for research at Wharton’s Neuroscience Initiative and Behavioral Lab.
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Walter “Buck” Buckley — now a cofounder of SEMCAP — is, arguably, most famous for founding Internet Capital Group, a venture firm that went through the boom-and-bust cycle at the turn of the 21st century. At its peak, ICG was valued at over $50 billion, with Buckley himself turning a paper billionaire. But the fortunes of both declined sharply — as much as 99%, when ICG stock cratered to a mere 70 cents apiece.
In 2020, Buckley joined hands with investor Cyrus Vandrevala to establish SEMCAP and focus on three verticals — food and nutrition, healthcare and education. Besides NeuroFlow, SEMCAP’s portfolio companies include Noodle Partners, McGraw Hill Education, SafeRide, Purely Elizabeth and Good Culture.
Prior to ICG, Buckley oversaw acquisitions at the venture capital firm Safeguard Scientifics, besides crafting its multimedia and Internet investment strategies. Before Safeguard, Buck spent three years at CoreStates in the commercial lending group. Today, he is a director at startups such as Diagnostic Bio Chips, Dropps, Happy Being and Margaux, and also serves on the board of Philadelphia-based FS Investments, which manages assets of over $35 billion.
