Axios Pro Exclusive Content

Enthea seeds $2M for psychedelic treatment

Illustration of a large cap mushroom inside of a pill bottle.

Illustration: Aïda Amer/Axios

Enthea, a benefits provider for psychedelic-assisted therapy, has closed on $2 million in seed funding — the first of two tranches, CEO Sherry Rais tells Axios.

Why it matters: Unlike most psychedelic-assisted therapy efforts that focus on drug development, Enthea is following a more established playbook as a third-party administrator (TPA) to administer less conventional benefits.

Details: Tabula Rasa Ventures led the round, with participation from Mystic Ventures and former Meridian exec Mike Cotton.

  • Enthea is now raising the second tranche, an additional $1.5 million, that's expected to close in Q1 2023, Rais tells Axios.
  • The capital gives a runway of about two and a half years, Rais says.

How it works: Enthea works with self-insured employers to give staff access to psychedelic-assisted therapy benefits.

  • Enthea's plans currently cover ketamine-assisted therapy, which is approved for off-label use by the FDA to treat myriad mental health disorders but is not covered by major payors.
  • Ketamine is approved for treatment-resistant depression, major depressive disorder, bipolar disorder, PTSD, generalized anxiety disorder, social anxiety disorder, substance abuse disorder and adjustment disorder.
  • In the next two years, Enthea looks to add MDMA and psilocybin-assisted therapies, both of which are in final stages of regulatory approval, says Tabula Rasa Ventures managing partner Marik Hazan.

Flashback: Enthea was initially founded as a nonprofit, launching a pilot with Dr. Bronner's this year.

  • The company subsequently ran out of money and paused onboarding efforts.
  • But after receiving significant inbound interest from employers, Enthea restructured as a public-benefit corporation and was able to secure the financing it needed to support demand, per Rais.

What they're saying: "We're doing something in the psychedelic space, but we're following a known playbook," Rais says. "We already have revenue, we already have a customer. It's a much easier place for us to raise money from."

By the numbers: By the end of next year, Enthea expects to generate about $250,000 in revenue and aims to have 100 customers, Rais says.

  • Customers include Daybreaker, Tushy and Guinn Partners, Rais says, joining Dr. Bronner's.
  • Enthea hopes to break even and book more than $4 million in revenue by 2024.

Context: Given the unique nature of psychedelic-assisted therapy — and the lack of infrastructure around standardization and accreditation — education is crucial, Rais and Hazan say.

  • "The therapeutic component is essential to see efficacy," Hazan says. "If you're not combining it with therapy, you could re-traumatize a person."
  • To help educate patients and providers, Enthea has a medical policy board with seven outside ketamine experts that convenes every two months to assess existing research, Rais says.

What's next: Enthea wants to be in 40 cities by the end of 2023, 80 by end of 2024 and 100 by 2025, per Rais.

Be smart: There's a significant provider shortage rankling health care, which could throw a wrench into Enthea's plans to scale, especially with a treatment that requires training.

  • With ketamine therapy, "demand is on our side," Rais says, adding, "There are more trained providers than we need to build our network."
  • As of 2018, there were at least 300 clinics providing the treatment.

Yes, but: With lack of regulation, not all ketamine clinics are created equal.

Go deeper