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Lyra Health, a provider of mental health benefits for employees, has raised $200 million in the latest funding round, bringing its total valuation to $4.6 billion.
The latest fundraising was led by investor hedge fund Coatue Management, with participation from new investor Sands Capital. Existing partners also participated in the funding round.
Lyra plans to use the money to accelerate its delivery of evidence-based mental health benefits for companies with employees located around the world.
“One in five people struggle with mental health challenges such as anxiety, depression, or substance use disorder. Delivering mental health care for diverse employee populations around the world is one of the most pressing and complex issues for employers today, and this new funding will help Lyra accelerate our plans to deliver comprehensive, global solutions,” said David Ebersman, Lyra Health CEO and co-founder.
The Information website reported that the latest investment comes just four months after Lyra raised $187 million in a Series E round, which valued the company at $2.3 billion. The website further added that the steep valuation rise between the rounds shows that late-stage startups are still garnering high prices from investors in the private market even as public stock investors have cooled on recent initial public offerings, particularly companies that list via mergers with special purpose acquisition companies.
The company has so far raised $680 million.
The Behavioral Health Business website said Lyra, which was founded in 2015, has exploded in recent years, reaching unicorn status in August 2020 in the wake of the COVID-19 pandemic, which has accelerated the demand for and the adoption of digital health services.
A statement explained that Lyra provides evidence-based care that supports people across all facets of mental health, from wellness and preventive care to the most severe conditions. Lyra’s innovative Blended Care Therapy pairs video counseling sessions, one-to-one messaging, and digital activities prescribed by the provider to support individuals in their everyday lives.
Based on Cognitive Behavioral Therapy principles, this immersive treatment model with ongoing support between sessions helps individuals improve faster. Lyra’s curated network includes more than 5,000 coaches, therapists, and doctors in the U.S., with an additional 85,000 providers available worldwide through global partnerships.
Lyra cited a peer-reviewed study that found that Lyra’s Blended Care Therapy helped 83 percent of participants improve or recover from anxiety or depression. Comparatively, just 24 percent of people who receive care through traditional health plans demonstrate reliable clinical improvement.
Lyra currently serves about 2.2 million people in the U.S. and internationally.
The National Alliance on Mental Illness estimates that nearly 48 million people in the U.S. or one in five adults, experienced mental illness in 2018. The demand for mental health care, and long-standing issues with access to care, is attracting attention during the COVID-19 pandemic and new players are jumping into the market. But the market continues to be underserved, according to industry leaders.
On the other hand, the World Health Organization believes that depression and anxiety disorders lead to $1 trillion in lost productivity worldwide each year.
With such statistics, it is not a surprise that Lyra is able to pull in such investments. At the moment, Lyra delivers mental health for employees and family members at leading multinational companies, including eBay; Genentech, a member of the Roche Group; Uber; and VCA Animal Hospitals.
Mental health startups have been doing well in investment rounds lately.
Last year, Mindstrong, a digital health company determined to transform mental health through innovations in virtual care models and digital measurement, raised $100 million in Series C fundraising. One of the lead investors in Mindstrong described the company as a once-in-a-generation company.
In 2019, national telehealth leader American Well acquired Aligned Telehealth, a leader in providing behavioral telehealth and telepsychiatry services to hospitals and health plans.