SonderMind Reaches Unicorn Status as Mental-Health Bets Surge

(Bloomberg) -- SonderMind Inc., a behavioral-health startup that matches patients with therapists, raised $150 million in a funding round co-led by Drive Capital and billionaire Azim Premji’s Premji Invest, vaulting the company to so-called unicorn status.

The fundraising values the Denver-based company at more than $1.1 billion, people with knowledge of the matter said.

SonderMind will spend the newly raised capital on expanding its platform, with ambitions to operate nationwide by 2023, co-founder and Chief Executive Officer Mark Frank said in an interview. The startup, which currently offers services in 12 states including Texas, Ohio and Arizona, may enter five more -- North Carolina, South Carolina and Massachusetts possibly among them -- by the end of the year, he said.

“We believe everybody should have access to therapy. The mental-health crisis is the defining health crisis of our generation, and the effects of it are untold,” Frank said. “The size of the problem is immense.”

SonderMind uses data to pair individuals with professionals who are both best suited to improve their mental health and geographically proximate so that in-person sessions are an option. “We’re focused on what the right care setting is,” Frank said, referring to the company’s hybrid model, which allows for telehealth treatments. “It can change week to week, or month to month.”

The company has delivered almost 1 million sessions since 2016, Frank said. It accelerated the launch of video services in the first quarter of 2020 due to the pandemic, a few months earlier than planned, he said. Currently, 65% to 70% of SonderMind’s patients use its telehealth options. The startup has almost 2,500 therapists on its platform who have seen a patient within the past 30 days.

SonderMind, available as an in-network resource to 73 million insured Americans, saw revenue growth of about 700% in the 18 months through March 31, Frank said, declining to provide a specific figure.

Drive Capital partner Molly Bonakdarpour, who is joining SonderMind’s board, said her firm invested in the startup because of its removal of barriers to accessing behavioral-health treatment.

“SonderMind created a marketplace that allows for therapists to be easily covered by insurers,” she said. The company goes beyond connecting patients with professionals by using data to home in on “phenomenal” clinical outcomes, Bonakdarpour said.

As an example, the startup has been able to bring patients with moderate depression to sub-clinical levels in six to seven weeks, Frank said. Those with severe depression have reached that level in nine to 10 weeks, he said.

General Catalyst, Partners Group, Smash Ventures, Kickstart, F-Prime Capital, Founders Circle Capital, Zoma Foundation and FCA Venture Partners are among other investors participating in the latest fundraising round.

Companies focused on mental health have gained favor with institutional investors in part due to ongoing destigmatization and adoption by patients.

“It’s been wholly under-invested for decades and really seeing it come to bear is heartening to me,” Frank said.

In May, Headway raised $70 million from investors including Andreessen Horowitz, while Lyra Health last month said it completed a $200 million financing led by Coatue. Another provider of mental-health care, LifeStance Health Group Inc., has rallied since its public debut last month.

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