Exclusive: Trek Health seeds $3M for mental health's coverage chasm
Trek Health raised a $2.7 million seed to help mental health providers accept insurance, CEO Dilpreet Sahota tells Axios exclusively.
Why it matters: An estimated 45% of psychiatrists don't accept any form of insurance, and an even greater share accept only a narrow set of plans.
Deal details: Lionheart Ventures led the round, and Lionheart partner (and Turo founder) Shelby Clark is joining Trek's board of directors.
- Other participants in the round include Founder Collective, Altman Capital's Jack and Max Altman, Ford Street Ventures' Matt Brezina, Snapdocs' Aaron King, Okta's Frederic Kerrest, former Salesforce CSO Clarence So and former One Medical VP of operations Rich Menendez.
Context: As the virtual care sector crowds, businesses that handle the administrative (read: unsexy) parts of the business are beginning to rake in venture funding. For example:
- Nitra, a fintech launching a Visa Business card for physicians, in August pulled in $62 million in debt and equity financing.
- Plug-and-play virtual care software developer Capable Health in May collected $6 million in seed funding.
- Heard, which handles mental health providers' back-of-office tasks, in May raised $10 million in Series A funding.
Be smart: The trend is especially apparent in virtual behavioral health, where an increasingly bright light is being shone on how few providers take insurance.
- Just last month, PsychHub, a startup founded by former U.S. Congressmember Patrick J. Kennedy that directs patients to in-network providers, raised $16 million in Series A funds.
What they're saying: Sahota agrees, saying, "We’re seeing a new wave of infrastructure companies helping providers be the best versions of themselves."
- Entrepreneurs including Sahota and Trek's head of partnerships Anthony Nelson also say they want to help therapists maximize their time with patients.
- "These providers got into this space to provide care, not to do billing," Nelson says.
The backstory: Moved by the dual tragedies of losing his mother to leukemia and witnessing a dearth of access to mental health care in the Central Valley of California where he grew up, Sahota hopes Trek's tools will help physicians boost care outcomes and avoid burnout.
How it works: Trek’s AI-powered tools integrate with electronic health record systems and help providers with claim reimbursement, automated claim generation, and submissions and payer enrollments across more than 900 insurance networks, Sahota says.
- Clients include behavioral health startups, inpatient mental health rehab centers, outpatient psychiatric facilities and outpatient psychotherapy centers.
What's next: Although Trek's foundation is behavioral health, the company plans to expand to other care verticals where providers are "left out" of the insurance coverage realm, such as dietitians and massage therapists.
- "We see growth opportunity there, too," Sahota says.