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Exclusive: Telemental health startup UpLift buys TAO

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Mar 11, 2024
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Telemental health startup UpLift acquired higher education-focused mental health provider TAO Connect for a mix of cash and stock, UpLift CEO Kyle Talcott tells Axios exclusively.

Why it matters: Three years out from the telemental health funding frenzy, UpLift sees itself as a future acquirer for cash-strapped startups looking for "a place to basically call home," Talcott says.

Zoom in: The deal happened last November, at the same time UpLift was closing its all-stock acquisition of online psychiatry provider Minded.

  • UpLift used existing cash and equity to finance the deal. TAO had generated about $2.2 million in revenue when UpLift acquired it, Talcott says, declining to disclose additional details.
  • TAO investors DeepWork Capital and New World Angels rolled their stock into UpLift, Talcott says, noting the deal was minimally diluting.

What's next: UpLift is integrating both Minded and TAO simultaneously, Talcott says.

  • While the company "probably won't be having another acquisition conversation next month," Talcott expects to see deal opportunities arise as telemental health players in need of capital assess their options.
  • UpLift, which is not yet profitable, raised about $11 million in Series A funds last July and wants to focus on integration efforts before raising again, Talcott says.

How it works: Tampa, Florida-based UpLift contracts with commercial plans, Medicaid and Medicare to offer virtual-first psychotherapy and psychiatry services that are covered by insurance.

  • Women-focused provider Minded brought UpLift core infrastructure to deliver its services nationally, while TAO brings a sizable customer base within higher education, Talcott says.

The big picture: Myriad telehealth startups targeting mental health raised large rounds at lofty valuations in 2021.

  • Many of these players address specific conditions or types of therapies, and expanding across more use cases typically requires capital — which is much less free-flowing than it once was.
  • Such businesses could be "a great tuck-in acquisition opportunity" for UpLift, Talcott says.
  • "I've talked to several companies that are like, 'Hey, you know, we're trying to find a place to basically call home and continue on the journey,'" he says.
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