Scoop: Marigold seeds growth with fresh funds

Marigold Health, a behavioral health company with a unique approach to substance use disorder, received $6 million in fresh financing led by KdT Ventures and Felicis Ventures, sources tell Axios.

Why it matters: Behavioral health startups are seeing a spike in investor interest as issues like pandemic-era burnout and job loss contribute to a rise in anxiety and depression, and Marigold is the latest example.

In January alone, deals in the space included:

• Silicon Valley-based Lyra raised $235 million and acquired ICAS World, tipping its valuation to $5.56 billion.
• San Francisco- and London-based Big Health collected $75 million, bringing its total raised funds to just under $130 million.
• New York-based Mantra Health, whose services are focused on students, raised $22 million after being founded last year.

How it works: Marigold's approach is distinct from the majority of behavioral health offerings on the market.

• The company gives people access to text-based, peer-monitored, anonymous group therapy and uses a combination of natural language processing and machine learning to keep tabs on client progress.
• That can be an appealing onramp for people who might not have access to other evidence-based treatments for SUD, such as medication-assisted treatment, Jain tells Axios.
• Marigold partners with providers including primary care clinics, substance use treatment providers and health systems, and Jain says the company has had a lot of success working with Medicaid plans.

Details: The company plans to use the seed financing to grow its peer workforce and to offer its services in three additional states — Maryland, Rhode Island, and Delaware — via new provider partnerships.

• For example in Rhode Island, Marigold is teaming up with Wood River Health Services, a large provider of medical and social services, to help integrate mental health treatment into its primary care programs.

• Flare Capital Partners, Epsilon Health Ventures, Tau Ventures, SpringTide Investments and Stand Together Ventures also participated in Marigold's seed round. 

The bottom line: As the virtual behavioral health sector continues to expand, different forms of therapy will gain increased attention from investors and providers. That includes but is by no means limited to:

• Treatments based on cognitive behavioral therapy, the primary type of evidence-based therapy that Lyra and Big Health provide virtually.
• Moderated peer support, the type of therapy Marigold is focused on.
• “Groups increase the capacity of a single certified peer by an order of magnitude,” says Jain. “As we expand nationally, our goal is to build the most diverse and qualified peer workforce."

Erin Brodwin co-authors the Axios Pro Health Tech deals newsletter. Subscribe at AxiosPro.com.