Mental health app Lantern cuts majority of its staff, plans to end commercial operations

By Dave Muoio
04:46 pm

San Francisco-based Lantern — a web and mobile platform offering cognitive behavioral therapy and mental health coaching to consumers, employers, and payers — will be laying off the majority of its staff as the company moves to taper its current commercial arrangements, CEO and cofounder Alejandro Foung told MobiHealthNews.

While a small handful of the team will remain on board to pursue new applications of the company’s technology — which Foung hinted could take the form of a National Institute of Mental Health (NIMH)-funded deployment among underserved populations — 22 employees will depart the company on August 1. All current Lantern users will still be able to access the company’s app until the end of the year, although its professional coaching services are no longer available.

“It is with a heavy heart that we are forced to admit that Lantern as it exists today will not be able to accomplish its mission,” the company wrote in a letter now posted on its homepage. “Mental health literacy and preventative care in underserved populations is a very real problem today, and the problem is only growing. A group of us here at Lantern believe we can take the learnings, technology, and skills we attained over the past six years and address this problem without a need to focus on profits and exit strategies.”

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Lantern, which launched in 2013 as ThriveOn and raised more than $20 million from investors, found itself targeting a handful of different audiences over the years. Following an initial $4 million grant from the NIMH to investigate the college demographic, Foung’s startup began in the direct-to-consumer space before jumping into the employer and payer-focused markets. The result, Foung reflected, was a company that eventually found itself spinning too many plates.

“Where you see companies that are still really doing well, or are still around, they pick a lane between [consumer, employer, and payer] and they build the business to drive value in those three markets,” Foung said, citing Calm, Headspace, Big Health, and AbleTo as examples of a well-defined business model.

“Most of those companies picked their market from the very beginning and stuck with it, and at Lantern we kind of passed through each. … I think we could have succeeded in any one, ultimately, and I believe the most in the payer commercial strategies because I think that’s the biggest opportunity and we had a compelling product. But the issue is we were already six years in and had raised $20 million. Who wants to invest a bunch more with not necessarily having a payout until two or three more years later?”

But while narrowing the focus of a health offering may help smaller VC-backed companies secure their best return, it also limits the impact that intervention may be able to provide. This juxtaposition was a point of frustration for Foung, who admitted that his company’s unfocused business plan and participation in low-revenue research projects was at least partially motivated by a company-wide interest in assisting as many patients as possible.

“The challenge is that when you’re in a field like ours, you don’t do this because you want to make a ton of money. You want to do it because you want to help people,” Foung said. “I think we did have a hard time — I personally had a hard time — not wanting to help and do things that were really important for the field and the world. And sometimes, not always, but sometimes that conflicts with what we’re focusing on [as a business].”

Lantern’s decision to release staff and scale back operations may have been forced, but it does come with a silver lining for the founder. While he was hesitant to describe the company’s next moves until things are set in stone, he noted that the company is likely to receive a “very large” grant from the NIMH able to support the smaller team as it returns to its roots.

“The core of our work moving forward is the markets that don’t have a business case against them,” Foung said. “Who’s serving the high school market? Who is serving the university college market? Who’s building products for that demographic, people who basically fall through the cracks and don’t fall into one of those for-profit business strategies? We’re principally interested in thinking about how we can take everything we’ve build and allow much broader access in a way that would otherwise be very difficult if we hadn’t already built what we’ve built.”


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