Modern Health raises another $74M to meet employers' demand for mental health benefits

This is the third funding round for Modern in about 13 months, and propels the San Francisco company to unicorn status.
By Dave Muoio
12:29 pm
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San Francisco-based mental health and wellness platform Modern Health has kept its foot on the gas throughout the COVID-19 pandemic. Today it announced a $74 million Series D funding round just a few months after a $51 million Series C closed in October and formally announced in December.

The new investments peg Modern Health's lifetime funding to more than $170 million, the company said, and its valuation to $1.17 billion.

Returning backer-founder Fund led the Series D round, which also had participation from Lachy Groom. Prior investors in the company have included Battery Ventures, Kleiner Perkins Felicis Ventures and 01-Advisors.

WHAT IT DOES

Modern Health works with employer-customers to provide an app-based package of mental health benefits. Employees are first asked to complete a survey on their focus areas, concerns and current state of mind, and then are provided with a selection of digital programs that address their needs.

These offerings address issues such as stress, financial wellbeing, work performance, and relationship guidance, and can be augmented with remote coaching or with live group or one-on-one therapy.

Alongside its flurry of fundraises, Modern's announcement also highlighted the company's recent growth. In 2020, the startup tripled its staff and doubled its customer base to more than 220 clients. Modern attributes much of that growth to new demand resulting from COVID-19, but also highlights its engagement rates and outcomes as a selling point to employers.

According to the company, the majority of employees registered on the platform complete at least two therapy sessions, more than half are engaging with their care and nearly half who start coaching sessions due to depressive-related symptoms demonstrate clinical recovery after four sessions.

“If there is one thing we’ve learned from this past year, it’s that prioritizing employee mental health is critical for all companies – no matter the size. We should not have to wait until there is a global pandemic to take action,” Alyson Watson, CEO and founder of Modern Health, said in a statement.

“Business leaders have an imperative to prioritize the wellbeing of their workforces, because it directly impacts company productivity and performance – and because we care about our employees at work and outside of it.”

Notably, a couple of weeks ago, the company also shed light on the acquisition of fellow digital mental health startup Kip, as well as plans to integrate its data-tracking, analytics and user-communications technology into Modern's own offerings.

WHAT IT'S FOR

Modern said that the new funding will "help the company to continue its impressive upward momentum, supporting additional enterprises and offering a variety of accessible, innovative, and customized mental health management options to workforces worldwide."

THE LARGER TREND

Modern's pandemic-driven upward trajectory is a familiar story for other tech platforms addressing employee and consumer mental health and wellness. In its annual digital health funding report, Rock Health highlighted the virtual mental-healthcare space as a clear beneficiary of COVID-19-driven demand.

For the employer and enterprise market, startups like Lyra Health, Vida Health and Ginger each announced sizable funding rounds in the last year. Other brands more focused on consumers, such as Talkspace or Headspace, have also signaled strong growth this year, while telehealth and telehealth names like Hims & Hers expanded their offerings to include behavioral health services like virtual therapy.

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