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Atalan Tech, a Boston-based company using AI to predict and prevent clinician burnout and turnover, raised a $2.5 million seed, CEO Tiffany Chan tells Aaron exclusively.

Why it matters: Post-pandemic, a growing portion of physicians have experienced burnout, leading to staff turnover and shortages.

Details: The growth financing round was led by Excelerate Health Ventures and co-led by OCA Ventures, with several angel investors in the mix as well.

The company's pre-money valuation was $3 million, Chan says.

Funds will fuel research and development, expand its science team, and ramp up sales and marketing efforts.

How it works: Atalan Tech's platform helps with planning and predicting departments and hotspots that could be problematic when it comes to burnout.

Atalan Tech's machine learning models extract and evaluate more than 100 burnout and turnover risk variables to identify risk drivers, pulling data from electronic health records (EHRs) and human resources information systems.

Once the platform identifies risk drivers — like lack of workplace control and flexibility, hindrance in patient-facing workflow, etc. — it develops interventions and solutions, Chan says.

Atalan Tech also determines the ROI and efficacy of those interventions.

The company currently has eight health system partners, according to Chan. She says that figure is set to grow to 15 by the end of next year.

Zoom in: According to Chan, Atalan Tech can predict up to 12 months ahead of turnover, allowing lead time for health systems to implement burnout interventions.

It uses data that taps into what the workplace environment looks like day-to-day for a clinician — patient acuity, patient volume, the volume of patient appointment cancellations, etc.

"Together, these data points can point to why a clinician might be at risk of burnout and turnover," Chan says.

Between the lines: Atalan Tech draws from existing data already available within health systems, as opposed to adding another layer of administrative burden on doctors.

"We do not require health systems to deploy additional surveys as we understand that our healthcare workers are incredibly busy," Chan says.

Atalan Tech's platform was designed in partnership with clinical psychologists with expertise in trauma-informed care to ensure its interventions are protecting the well-being of health care workers, Chan notes.

What they're saying: "Clinician burnout is a pressing issue affecting our medical industry," says Bobby Bahram, managing partner at Excelerate Health Ventures.

"Atalan Tech's technology allows companies to address this problem at an early stage, ultimately enhancing the lives of healthcare professionals and patients alike," he adds.

Chan notes a commitment to ethical AI, saying, "We have put together a process to check our models for potential biases and we embed ethical considerations into our day-to-day decision-making regarding our product."

What's next: Atalan Tech expects to raise a second seed round next year, Chan says.

"We are forecasted to break even in early 2025, if not sooner," she says.

Chan confirmed the company is currently generating revenue, but declined to get into specifics.

State of play: There are several companies devoted to reducing burnout in health care settings, though many are point solutions that are not wholly comprehensive.

CalmWave, which is designed to reduce alarm fatigue for bedside healthcare workers, raised a $4 million seed in 2022.

Laudio, a health care operations management software company to improve the relationship between nurse managers and nurses, raised $13 million Series B.

Other players include Vital Worklife, which offers professional coaching and EAP for physicians and health care workers, and StressPal, which offers resilience training for health care workers.

Additionally, Google-owned Fitbit offers stress management and personal habit development tools.

1 big thing: Atalan Tech seeds $2.5M for doc burnout

Illustration of a stethoscope wrapped around a doctor's torso.

Headway, a startup that links people with in-network mental health providers, took in $125 million in Series C funding on a $1 billion valuation, Reuters reports.

Why it's the BFD: The raise is reflective of a larger trend in behavioral health tech that's seen venture dollars continue to flow into the sector even as overall digital health funding has plummeted, Erin writes.

Previous backers Thrive Capital, Accel, and Andreessen Horowitz joined, alongside insurance company Health Care Service Corporation.

Funds will go toward marketing and expanding the company's provider network, per Reuters.

How it works: The New York City-based company connects people with therapists and psychiatrists who accept insurance and offers providers access to its billing and claims tools.

When insurance companies pay Headway providers, the company takes a percentage.

Headway has 26,000 in-network providers affiliated with 19 insurance plans including Aetna, Anthem Blue Cross and Blue Shield, United, Cigna, and Oscar, per its website.

Be smart: The mental health sector continued its status as the top-funded clinical indication among health tech startups in the third quarter of this year, with nearly $1 billion deployed year to date, per a recent Rock Health report.

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.

And although demand for mental health services spiked during the pandemic, less than half of psychiatrists accept insurance.

What they're saying: "We've seen a whole class of entrepreneur therapists because we have unlocked the barriers to launch and grow your businesses. We've made accepting insurance easier, which means attracting way more patients," Headway CEO Andrew Adams told Reuters.

2. The BFD: Headway intakes $125M at $1B valuation

Venture-backed suppliers, providers, and enablers of mental health services have attracted significant interest in recent years, and the last few months have seen several large rounds go to those with a focus on in-network providers.

Crisis care provider Connections Health Solutions this week raised $28 million in Series B financing (see next item).

Insurance-accepting telemental health startup UpLift in July collected $10.7 million in Series A capital.

School-focused telemental health startup Cartwheel in September raised $20 million in Series A funding.

Some of the mental health enablers include:

Blueprint, a developer of patient tracking and outcomes assessment tools for therapists, this June closed a $9 million Series A round.

Heard, which offers therapists tools for bookkeeping, payroll, and taxes, in June raised $15 million after closing a $10 million Series A last May.

Eleos Health, whose provider-facing AI-powered tools analyze behavioral health sessions, last April input $20 million in Series A financing.

3. State of play: Mental health services technology 

Illustration of an overhead projector illuminating a square that says State of Play

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

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."

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.

Blueprint, a developer of patient tracking and outcomes assessment tools for mental health clinicians, this June closed a $9 million Series A round.

4. Connections Health raises $28M Series B

Photo illustration of a brain with race car tires.

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

Want more health tech deals? Check out the Axios Pro Deals Tracker beta.

• Diana Health, an NYC-based operator of a network of women's health practices, raised $34 million in Series B funding led by Norwest Venture Partners. https://heydianahealth.com/ 

• Lokavant, an NYC-based pharmaceutical trial management startup, raised $8m in additional Series A funding from Mitsui & Co. https://www.lokavant.com/en-us/

• Smileyscope, an Austin- and Melbourne, Australia-based developer of immersive digital therapeutics, raised a seed round with participation from Breakthrough Victoria, Ten13, Alice Anderson Fund, and MedAngels. https://www.smileyscope.com.au

• Casdin Capital-backed Standard BioTools and SomaLogic agreed to merge in an all-stock deal that values the new company at $1b+. https://axios.link/45l9fQb

• S&S Health, a Cincinnati-based health care administration company, received a majority growth investment from Lovell Minnick Partners. http://www.ss-healthcare.com/ 

• General Catalyst will merge portfolio companies Commure, an SF-based developer of operational technologies for health systems, and Athelas, a Mountain View, Calif.-based provider of remote patient monitoring and billing tools for health care. https://axios.link/3ZH2FC2

5. Deals o' the day

• At Laudio, Emma Smith left a post as chief communications officer at Linus Health to become chief marketing officer and Michael Vipond left a post as SVP of workforce management at Symplr to become EVP of sales. https://www.laudio.com/

• At Prenosis, Robin Carver became VP of health system engagement, Brian Bray became VP of technology, Carlos Lopez-Espina became SVP of R&D and Pratik Sinha joined the company's scientific advisory board. https://prenosis.com/

• At MEMIC, Ruchir Jaipuriyar left a post as director of data services at RBC Wealth Management to become VP of IT and Bryan Kotlyar left a post as senior director of algorithm engineering at S&P Global Platts to become director of software engineering. https://www.memic.com/

• Molly Fitzpatrick was promoted from VP to principal at The Halifax Group. https://thehalifaxgroup.com/

• Derek Wilson, formerly VP of business development at Sound Physicians, joined Talkiatry as VP of strategic partnerships. https://www.talkiatry.com/ 

6. It's Personnel

🏥 How the Kaiser Permanente strike could affect the whole health care industry — Axios

7. Your daily dose

illustration of a digital thermometer that reads "daily dose" 

🤝🏻 Situational awareness: Erin, Aaron, and Claire will be at HLTH in Vegas next week. Make sure to say hello and don't miss Erin's session with Google SVP James Manyika on Monday at 9am PST.

🥩🍝 Aaron is flying to Vegas tonight and has started mentally preparing for his first HLTH. He is very excited for his pre-conference reservations this weekend at Hell's Kitchen and Carbone. 

❤️‍🔥 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends and family to sign up.

October 05, 2023

1 big thing: Atalan Tech seeds $2.5M for doc burnout