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Exclusive: Connections Health lands $28M Series B for value-based crisis care

Photo illustration of a brain with race car tires.

Photo Illustration: Brendan Lynch/Axios. Photo: Xisco Navarro/SOPA Images/LightRocket via Getty Images

Behavioral health crisis care provider Connections Health Solutions landed $28 million in Series B funding, CEO Colin LeClair tells Axios exclusively.

Why it matters: Demand for mental health crisis and stabilization services has skyrocketed amid the pandemic and opioid epidemic, and suicide rates among young people specifically reached a 20-year-high in 2021.

Details: Town Hall Ventures led the round. Previous backer Heritage Group joined.

  • Funds will power the building of new sites in Washington and Virginia, honing the company's infrastructure, tech, and health data analytics tools.
  • The timing of Connections' Series C will depend on the availability of future grant fund. "If grant funding dries up faster we'd probably have to raise sometime in 2025," LeClair said.
  • LeClair said he expects Connections to reach profitability "in the next few months," but declined to share specific revenue figures.

How it works: The Phoenix-based company operates value-based crisis response centers in Arizona and Montana and more recently Washington and Virginia, including:

  • Behavioral health-focused urgent cares, emergency psychiatric units, crisis stabilization units, and outpatient treatment and support programs.
  • "The essence of the model," says LeClair, is "always having an open door to patients in psychiatric emergency and aggressively managing their discharge and their stabilization."

Driving the news: The Substance Abuse and Mental Health Services Administration (SAMHSA) in April mandated that community behavioral health clinics provide crisis and stabilization services like the kinds Connections offers.

  • "We're moving in the right direction, but it's still not enough," says Town Hall Ventures partner and Connections investor David Whelan.
  • Meanwhile, mental health continued its status as the top-funded clinical indication among health tech startups in the third quarter of this year, with $.9 billion deployed year-to-date, per a recent Rock Health report.

What they're saying: "A big part of our model — and the reason we're named Connections — is because we build these relationships with providers and stakeholders to make sure when our patients leave us, they land well," says LeClair.

  • "The standard of care is abysmal today because the majority of people end up in the ER," Whelan says. "Not many places are worse than the loud, chaotic environment of the ER to get people stabilized and connected with care."

By the numbers: As of March, 160 million people in the U.S. live in areas with a shortage of behavioral health providers, and an estimated 8,000 more professionals are needed for an adequate supply.

State of play: Startups looking to both provide and enable mental health services have attracted significant venture attention as demand continues to outpace supply. For example:

  • School-focused telemental health provider Cartwheel in September raised $20 million in Series A funding.
  • Insurance-accepting telemental health startup UpLift in July collected $10.7 million in Series A capital.
  • Blueprint, a developer of patient tracking and outcomes assessment tools for mental health clinicians, this June closed a $9 million Series A round.
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