On-demand mental health company Ginger.io scooped up $50 million in a series D round that was led by Advance Venture Partners and Bessemer Venture Partners. Participants also included Cigna Ventures and existing investors such as Jeff Weiner, executive chairman of Linkedin, and Kaiser Permanente Venture. The funds are earmarked to advance research and development, grow strategic partnerships and expand core work with employers.
In conjunction with the financing, Ginger added David ibnAle, a founding partner of Advance Venture Partners, and Steve Kraus, partner at Bessemer Venture Partners, to its board of directors.
“AVP invests in companies that are using technology to tackle large-scale, global challenges and transform traditional businesses and business models,” ibnAle said. “Ginger is doing just that.”
The round puts Ginger’s total funding to date at $120 million.
Record high demand
The series D round comes as COVID-19 is fueling increased demand for mental health services and virtual care solutions. According to the San Francisco-based company, nearly 70% of U.S. workers said the outbreak has caused unprecedented stress in their careers, more so than after the Sept. 11, 2001, terror attacks and the Great Recession of 2008. During the month of July, Ginger saw record-high demand for mental health support, with weekly utilization rates for coaching and therapy/psychiatry that were 125% and 265% higher, respectively, than pre-COVID-19 averages.
“Our mental health care system has long been inadequate. But in the midst of a worldwide pandemic and a tumultuous sociopolitical climate, we’re facing uncharted territory,” said Russell Glass, Ginger’s CEO. “People are demanding better care, and the largest payers of health care are recognizing the need to respond. “Ginger is uniquely able to reverse the course of this crisis at scale. With this investment, we can accelerate our work to deliver incredible mental health care at a fraction of the cost to the hundreds of millions of people around the world who deserve it.”
Collaborative care model
Spun out of the MIT Media Lab in 2010, Ginger’s app-based mental health offering employs a collaborative care model, with health coaches, therapists, psychiatrists and evidence-based content all brought together under one virtual roof, Glass told BioWorld. “Upon joining Ginger, our members have access to a behavioral health coach within 60 seconds, any time of day or night.
These coaches help members manage issues ranging from daily stress and anxiety to mild depression. If a member needs more mental health support, a therapist or psychiatrist is added to their team.
The collaborative approach improves outcomes and saves money, said Glass. “Ginger costs 3.4x less than a therapy network, because we treat people more efficiently using evidence- and measurement-based care to get members healthier, faster. For those who engage in Ginger’s programs and services, we reduce their medical costs by approximately 17 percent and indirect costs 46 percent.”
That kind of savings could save lives by expanding access to mental health services. According to a 2017 Peterson Center on Healthcare-Kaiser Family Foundation survey, 13% of respondents said they or a family member went without needed mental health care because they couldn’t afford the cost. Another 12% said they forewent mental health care because their insurer didn’t pay for it.
People are struggling
Glass said COVID-19 has increased people’s concerns about financial stress, loneliness and isolation, worry about family and loved ones, relationship and parenting issues and general fear of the unknown. In mid-June, the company’s coaches reported that conversations with members were 26% more intense than before the pandemic, based on a five-point scale. Members also had record high levels of depression symptoms at intake, as measured by the Patient Health Questionnaire-2, a screening tool for mental health disorders.
“Clearly, workers have been struggling under the constant stage or uncertainty and foundational changes to both their personal and professional lives,” he said.
Despite the upsurge in demand, Ginger has not needed to do any significant hiring, Glass said. Median response time has remained flat and in some cases improved – i.e., 44 seconds to a coach and 10.5 hours to a therapist or psychiatrist – and effectiveness rates have also remained high, with 70% of people reporting improvement in 10 to 14 weeks. On a 5-star user satisfaction scale, Ginger averages 4.7.
Use of proceeds
To bend the supply/demand imbalance in mental health care and speed access to on-demand services, Ginger is targeting the new investment at three key areas. It will continue to focus on leveraging technology to help scale high-quality, cost-effective care for its members, while also enhancing the experience for care providers. The funds will also be used to advance the company’s peer-reviewed research efforts. Last week, the company announced the formation of an advisory board comprised of world-renowned researchers, data scientists and employee benefits experts.
In addition, Ginger will work to expand its partnerships with national and regional health plans and other strategic partners to increase access to mental health care. And it ramp up its efforts with its core business, employers. “Now more than ever, employers have a responsibility to support the mental health of their employees,” Glass said.
With the series D financing wrapped up, Glass declined to comment on a possible exit strategy for the company. “We can tell you that we are very confident in our ability to execute on our plan, which includes continued exponential growth and a near-term path to profitability,” he said.