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Telemental health startup Headway to be valued at $1B

Illustration of a cell phone on a therapy couch

Illustration: Sarah Grillo/Axios

Skyrocketing demand for therapy and a dearth of insurance-covered options are propelling mental health startups to unicorn status — even in a market that is making unicorns increasingly rare.

Driving the news: Hybrid mental health therapy network operator Headway is in talks to raise $100 million in fresh funds at a $1 billion valuation, per Bloomberg.

  • Investors would include Spark Capital and insiders Thrive Capital, Andreessen Horowitz and Accel.
  • Headway last raised $70 million in a 2021 Series B round at a $750 million valuation.

Be smart: An estimated 45% of psychiatrists don't accept any form of insurance, and most that do take coverage from only a narrow set of plans.

State of play: Other startups are attempting to tackle therapy's dearth of insurance coverage with administrative automation tools and directories of in-network therapists. For example:

  • Trek Health aims to help providers accept insurance with AI-powered claim, submission and enrollment tools and last fall raised $2.7 million in seed capital.
  • PsychHub, a directory of in-network therapists founded by former U.S. Congress-member Patrick J. Kennedy, last summer closed a $16 million Series A round.
  • Heard, which offers mental health providers automation tools for back-of-office tasks, last summer collected $10 million in Series A funding.

How it works: Headway operates a network of covered therapists in 15 states.

  • Providers charge $20 to $50 for in-person and online sessions and accept insurance from payers including Aetna, Anthem, Cigna, Oxford, UnitedHealthcare and Oscar.

Our thought bubble: Headway's three-pronged strategy — tools for patients, providers and payers — could give it a leg up over startups offering just one component.

  • What remains to be seen is whether it can scale while generating positive outcomes for its three constituents.

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