Headway Secures $100 Mn Series D Funding for Mental Health Services Expansion

This new capital will support the startup’s expansion into Medicare Advantage and Medicaid, aiming to enhance access to mental health care for a broader range of patients.

Headway, a New York City-based mental health startup, announced on July 24, 2024, that it has raised $100 million in its Series D funding round.

This new capital will support the startup’s expansion into Medicare Advantage and Medicaid, aiming to enhance access to mental health care for a broader range of patients.

The Series D round, led by Spark Capital, included contributions from existing investors Thrive Capital, Accel, and a16z and new investor Forerunner Ventures. This funding elevates Headway’s valuation to $2.3 billion, reflecting a 130% increase from its previous valuation.

Commenting on the startup’s financial performance and growth, Andrew Adams, Headway’s founder and CEO, said, “Headway’s revenue has doubled in the past 12 months. At our scale, that makes us among the fastest-growing startups in the U.S. In this capital market, being world-class at growth is not enough; we’re also world-class efficient in unit economics.”

Expanding Access to Medicare & Medicaid

Per the startup, the Series D funding will aid Headway in providing mental health services through Medicare Advantage and Medicaid, which collectively cover over 100 million Americans.

The startup also plans to be operational with Medicare Advantage in all 50 states and Washington DC, by the end of 2024, with Medicaid services set to launch in 2025.

“When we surveyed providers on our platform last year about this topic, they said that the number-one reason they took insurance was to 'provide access to care for those that may not be able to afford private pay services,” Adams stated.

A report from the US Department of Health and Human Services in March 2024 highlighted that one in three Medicaid beneficiaries and one in four Medicare beneficiaries live with a mental illness.

However, a shortage of mental health providers often limits access to necessary care.

Addressing the operational challenges of working with government programs, Adams said, “Government programs have an additional layer of operational burden, such as more complex credentialing processes and stricter compliance requirements, compared to commercial plans. We’re investing in the technology to relieve this operational and administrative burden and ultimately make it easy for clinicians to deliver care to these patients.”

Since its last funding round in October 2023, Headway has experienced substantial growth. The startup now operates across all 50 states and has established partnerships with over 34,000 in-network mental health providers.