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SonderMind CEO talks M&A: "We're a natural consolidator"

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Illustration: Sarah Grillo/Axios

As SonderMind CEO Mark Frank mulls his behavioral health company's future capital strategy, his mind is on acquisitions. "We’re a natural consolidator," Frank tells Axios.

Why it matters: SonderMind could fill a gap in the telemental health M&A market, where few strategic acquirers (besides Ginger-Headspace) have formed successful rollups.

Details: Through acquisitions, SonderMind wants to build out specialized programs, tackling low to high-acuity issues such as demographically focused care, bipolar disorder and perinatal care.

💭 Our thought bubble: Several niche behavioral health startups could be attractive targets for SonderMind, including:

  • Daybreak Health, a school-facing behavioral health startup that raised $10 million in Series A funds in March.
  • Mindstrong, a company building digital tools to better measure mental illness, raised $100 million in Series C funds in 2020.
  • Oath Care, a maternal and pediatric mental health startup that received $6 million in seed funding in February.

Yes, and: More established telemental health companies have raised large rounds recently, including Lyra Health, which collected $235 million in Series F funding in January, and Brightside Health, which raised $50 million in Series B funding in March.

Yes, but: While dozens of startups exist that address low-to-mid-acuity mental health issues, far fewer treat high-acuity issues, where the majority of cost resides — though that's beginning to change.

  • “We are going to start seeing more and more funding going toward specialized providers," 8VC partner Sebastian Caliri told Rock Health last year.

State of play: SonderMind, which hit unicorn status with its last fundraise, is wary of recent volatile market conditions that have impacted its peers in digital health.

  • "We have many years of runway," Frank says, so "right now it’s about focusing on the core business and not doing a big raise for a year or two at least."

Flashback: The Denver, Colorado-based company raised $242 million in an October 2021 Series C led by Drive Capital and Premji Invest.

  • In October, it acquired predictive behavioral analytics startup Qntfy.
  • Since closing its Series C, SonderMind has doubled its revenue, Frank says, declining to disclose financials.

How it works: SonderMind leverages machine learning and natural language processing to match patients seeking a therapist with a practitioner they can see in-person or virtually.

  • "The hypothesis is we can take a lot of this data that's being collected and combine it with wearable data and use it to say, 'Here’s where you are, and here’s how we can use that to inform getting you better and managing your overall well being,'" Frank says.

The backstory: Like many health care founders, Frank got into telemental health after his own rocky experience with the system. While searching for a therapist who took his insurance, he discovered he had very few options.

  • "You’d call, they wouldn’t answer, and those that did weren’t accepting new clients, or they’d moved to a new part of town, or they didn’t have availability for 3 months," Frank recalls.
  • By the time he finally found someone, he discovered that while the caliber of care was good, "the consumer experience around it was bad" — from going into the office to paying for the service, he says.

What's next: SonderMind is still building its platform with the goal of eventually pulling in as much user data as possible — purely on an opt-in basis — to help and inform its patient-therapist matching process.

  • "We don't have the framework yet that’s for the mass consumer to bring in all that data and do that, but that’s where we want to go," Frank says.
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