Exclusive: Journey Clinical raises $9M to support psychedelic therapy

Psychedelic medicine infrastructure company Journey Clinical raised $8.5 million in Series A funding, CEO Jonathan Sabbagh tells Axios exclusively.

Why it matters: Confronted with a worsening mental health crisis, a shortage of psychiatrists and stale treatment options, U.S. regulators are beginning to consider psychedelic medicines — treatments Journey Clinical aims to support — as an alternative.

Deal details: Union Square Ventures led the round, bringing Journey's total funding to roughly $12 million and marking the firm's first investment in the psychedelics sector.

• Other participants included AlleyCorp, Fifty Years, Able Partners, Gaingels, Palo Santo, PsyMed Ventures, Coalition Partners, Mystic Ventures, Colibri, Satori Capital and other individual backers.

State of play: Boosted by hopeful research, rising investor interest and an increasingly friendly regulatory milieu, market appetite continues to grow for companies focused on psychedelic treatment.

• Enthea, a benefits provider for psychedelic-assisted therapy, last December raised $2 million in seed funding.
• Mindstate, a startup applying AI-powered drug discovery to create a pipeline of potential psychedelic therapeutics, last February raised $11.5 million in seed funds.
• MindMed (Nasdaq: MNMD) in 2021 became the second psychedelic drug developer to go public in the U.S. after Compass Pathways (Nasdaq: CMPS) debuted in 2020.

How it works: Journey offers therapists a plug-and-play platform to conduct psychedelic-assisted psychotherapy, or the supervised use of psychedelics alongside therapy.

• It charges therapists a $200 monthly fee and charges patients $250 for the intake process and $150 for follow-ups.
• That includes Journey's telehealth platform, which allows it to verify patients' eligibility, track outcomes and monitor for adverse effects.

The backstory: Sabbagh started Journey after realizing that therapists interested in providing psychedelic-assisted therapy had no back-end support to do so.

• "So we built a platform that gives therapists everything they need to incorporate this into their practice," Sabbagh says. "Our primary client is always the therapist."

What's next: The company is starting with ketamine but Sabbagh says it plans to expand to other treatments, like psilocybin and MDMA, as they are approved by regulators.

What they're saying: Amid a provider shortage and scant resources and standards for existing clinicians to provide psychedelic-assisted treatment, Journey's offering makes rational sense, says investor and USV general partner Rebecca Kaden.

• "They're empowering practitioners to broaden the scope of their toolkit," Kaden says, and working with them "to decide whether the patient is a good fit."