Headway, a New York startup enabling easier access to insured mental healthcare, has raised $125 million in Series C funding led by Boston-headquartered Spark Capital. Other investors who participated included New York’s Thrive Capital, West Coast firms Accel and Andreessen Horowitz, and Chicago insurer Health Care Service Corp.
Founded in 2019, Headway claims to be the largest mental health provider in the country today, with more than 26,000 therapists, psychiatrists and nurse practitioners in its network. It has raised over $221 million from venture firms, with the latest round giving it a valuation of $1 billion. Following the Series C round, Headway handed a board seat to Will Reed, a general partner at Spark Capital, which has offices in Boston, New York and San Francisco.
“We’ve seen a whole class of entrepreneur therapists because we have unlocked the barriers to launch and grow your businesses. We’ve made accepting insurance easier, which means attracting way more patients,” Headway co-founder and CEO Andrew Adams told Reuters.
In a LinkedIn post, Adams said the number of mental health professionals in Headway’s network grew 93% over the past year. Headway is “on track to be live in all 50 states and [Washington] D.C. by the end of the year,” he added.
Headway was founded by the foursome of Adams, Dan Ross, Jake Sussman, Kevin Chan. Ross is a serial entrepreneur who now runs NewCo in Seattle, Wash. Sussman was previously an analyst at Goldman Sachs, while Chan runs a cash management firm, Mayfair, in Austin, Texas.
Adams said he hit upon the idea for Headway after discovering how hard it was to reach therapists on an insurance’s network after relocating to New York. Most therapists, he said, chose not to work with insurers because of a tedious process, making it unaffordable for those in dire need for such service.
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Today, Headway has built a system that makes it easier for therapists to join an insurer’s network. “Over two years in just one market, our providers expanded access to in-network mental healthcare for more than 50,000 members of a regional Blues plan,” said Adams. Of them, 30,000 received care from a provider who was not in-network with their insurance prior to using Headway, he added.
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Founded in 2005, Spark Capital has funded some path-breaking technology companies, including Slack, Twitter and Discord. Its general partner Will Reed started his career at Merrill Lynch’s high-yield credit division, and later joined Welsh Carson as an investor. Spark’s recent investments include Sonera Magnetics, AI21 Labs, Ramp and Nomad.
Thrive Capital was founded by Josh Kushner, the brother of Donald Trump’s son-in-law Jared. Its investors include Disney CEO Bob Iger, billionaire Henry Kravis and India’s Mukesh Ambani. In early 2022, Thrive closed a $3 billion fund, its eighth. Today, it has assets under management of about $16 billion, according to Forbes. Instagram, Spotify and Slack are among its most successful bets.