Grow Therapy lands $45M Series B to help therapists build independent practices
When we met Grow Therapy in June 2019, mental health access was already an obvious venture category. Startups such as Alma, Headway, SonderMind, Talkspace, and Spring Health had raised large growth rounds fueled by the insatiable demand for access to behavioral health therapists.
With over 43 million people in America suffering from mental illness every year, the market quickly segmented by patient populations, geography, and care delivery methods. We were excited to meet Jake Cooper, Manoj Kanagaraj and Alan Ni, the co-founders of Grow Therapy and learn about their unique approach to improving access to mental health.
Grow Therapy recently announced their $45M Series B led by TCV and Transformation Capital. We’re honored to be one of the earliest investors and get a chance to share Jake Cooper’s (co-founder & CEO) reflections on the past few years.
What was the core hypothesis and conviction you had in launching Grow Therapy despite all the startups already tackling the mental health crisis?
When we founded Grow, we were very cognizant of the competitive landscape. While the idea of first-mover advantage is commonly known, we felt we had a very powerful second-mover advantage. Specifically, as later entrants to the market, we had several structural advantages.
First off, we built Grow to be a true technology business with no intention to provide brick and mortar real estate to providers. Other teams who had launched pre-COVID had sensibly assumed providers needed a physical space to treat patients and needed to be in population dense areas to reach patients. Our focus in providing only digital infrastructure to providers while simultaneously serving less population dense geographies gave us a structural advantage through the pandemic.
Second, our product focus uncovered an underserved customer segment — providers who were setting up practices for the very first time. As tele-health became the only option during the pandemic, the pandemic lowered the logistical barriers to setup a private practice. As our product was laser focused on digital infrastructure, we were able to serve our archetype -experienced clinicians starting their own practice for the first time — better than any other mental health startup. We did so by truly offering a practice-in-a-box: (1) patient acquisition and in-take, (2) end-to-end EHR, (3) insurance contracting and billing (4) digital community, and (5) powerful back office infrastructure.
Finally, we were obsessed with learning from incumbents and develop strong opinions early on patient acquisition, technology stack, and RCM being core competencies we needed to build in-house. We focused a lot of our resources on automation so we can scale delivery without headcount and that has become one of the differentiations we’re most excited about.
We have been so impressed by Grow’s payor GTM execution. Can you share some advice for other healthcare founders looking to build in-roads to large healthcare organizations?
There are two GTM motions we utilized. The bottom up approach is through traditional outreach and in the case of payors, it starts with a simple insurance agreement application. The top down approach was via strategic advisors and relationship introductions.
We found that we needed to do both but it was critical to start bottom up and demonstrate incremental progress. Before we had a national insurance contract, we had to get a regional agreement, and before that was a state level agreement. We started with a simple tech-enabled group practice agreement and used familiar standard contract terms instead of pushing for a custom agreement.
Bootstrapping off our success was the only way to really build momentum with large carriers but strategic advisors and top down relationships also helped. We were intentional about keeping our partners and advisors up to date with our progress. We sent periodic progress updates and also coupled that with opportunistic introduction requests which really helped us expand our relationships at each organization. In retrospect, sequencing was key. Advisors and introduction can really help but you need to build momentum on your own and be thoughtful about when to call in favors.
With this new well-deserved round of financing, what would you say were the major inflection points looking back on your journey so far?
We had several inflection points in the past few years. The first one was us quitting our jobs after running a $25 job ad and getting 50 applications for therapists who wanted to set up their own practice with us. This substantiated the provider side pain point and really gave us the confidence to start the business.
The second inflection point was when our first two providers each hit $10K of revenue per month after 6 months of working with Grow. They were earning more money through their own practice than they had made previously as employees of a larger group. We were so excited for them personally and also at the validation that we could scale patient acquisition to facilitate a better way for providers to build their own careers. We also saw along the way, several providers start to switch from their own point solution software systems to Grow’s product suite which was super validating that our platform was starting to consolidate their workflows and expenditures.
The latest inflection point leading up to our Series B was our path towards nationalized insurance partnerships. Via traditional network effects, we’ve aggregated such a massive network of therapists that we are now able to partner with payors who traditionally maintain closed networks in unique ways for the benefit of our providers and their members. Our economies of scale really validates the industrial value we are providing as a group practice to our providers and something we see only improving as we continue to expand nationally.
Visit Grow Therapy to join their team, find a therapist, or build your own practice!
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