Spring Health CEO April Koh

Digital Health

Spring Health Eyes IPO After $100M Series E

If 2024 wasn’t already the Year of Mental Healthcare, Spring Health’s $100 million Series E just cemented it.

The funding vaulted Spring’s valuation to $3.3B and made April Koh the youngest woman to helm a multibillion-dollar company in the process. Not bad for 31 years old!

Spring provides employers and health plans with access to a stable of over 10k contract therapists that can help improve outcomes while reigning in treatment costs.

• At the core of Spring’s platform is Precision Mental Healthcare, which uses AI to analyze patient data (symptoms, socio-demographic, “key factors”) and quickly match individuals to appropriate care.

• The value proposition seems to be resonating. Spring covers 10M lives through 450 directly contracted employers, strategic payor relationships, and channel partners.

The funding follows the recent expansion of Spring’s Global offering (soon to be available in 30 languages), the launch of Community Care (an SDOH initiative), and a big push for SpringWorks (a workplace culture program).

• Spring also touted that it’s the only platform of its kind to receive external validation for delivering employers a net positive ROI.

• That’s apparently been a key differentiator from other behavioral health heavy-hitters vying for the same employers. Headspace, Lyra, and Evernorth all jump to mind.

An investment memo from Series E participant Kinnevik helped color in the roadmap Spring outlined in its announcement.

• Outside of fueling Spring’s expansion into higher acuity needs and pediatrics, the funding was intended to strengthen up its balance sheet ahead of an impending IPO.

• The memo also revealed that Spring is in a good spot to be eyeing a public debut after growing run-rate revenue by 15x since 2021 and setting itself up to hit positive margins sometime next year. 

The Takeaway

Mental health is one of the defining problems of the decade, and Spring Health is at the forefront of addressing it. Scaling globally without sacrificing care quality is a delicate balance, but Spring believes that it’s “on track to build one of the world’s most valuable companies.”

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The Wire

• Waning Trust in Healthcare: Public trust in physicians and hospitals continues to decay, and now stands at an abysmal 40% (down from 72% pre-pandemic). The JAMA Network Open analysis of 24 surveys conducted between April 2020 and January 2024 (443k U.S. adults) showed the steepest trust declines among respondents aged 25-64, women, rural residents, and the less educated. Since lower levels of trust were associated with lesser likelihood of pursuing vaccination, the authors concluded that “restoring trust may represent a public health imperative.”

• Devoted E Extension: Medicare Advantage payvidor Devoted Health added an additional $112M to the already-massive $175M Series E it closed in December, landing it a $13B valuation. The funding will open expansion to seven new states after Devoted grew its membership total from 142k to 227k throughout just this year. Devoted already operates health plans in 13 states, and it’s hoping that its strategy of keeping members healthier through additional virtual / in-home services will allow it to build a sustainable business where others have struggled.

• AI For Suicidal Ideation: A study in JMIR Mental Health highlighted the ability of LLMs to accurately predict mental health crises in a fraction of the time it takes clinicians. After analyzing deidentified patient-provided data from 140 Brightside Health users, GPT-4 had similar accuracy (62%) predicting “suicidal ideation with a plan” as clinicians (55.2%-67%), and also evaluated the samples in 10 minutes, compared to three hours for the clinicians.

• CVS and OSH Move in Together: CVS and Oak Street Health are moving in together, and expect to have 25 Oak Street clinics located next to a CVS pharmacy before the end of the year. After a successful pilot in Houston, the duo is rolling out three co-located clinics in Chicago before moving on to New York, Dallas, and Columbus. Oak Street also plans to open 25 separate stand-alone clinics over the next few months.

• UC or ER? University of Florida Health and private equity-backed Intuitive Health opened three combined urgent care center and emergency room facilities, a new model that the Washington Post thinks could cause confusion for patients. Although on-staff physicians recommend which side of the building to go to, patients might not realize that costs vary dramatically between the services. The worry is that UF Health has an incentive to steer patients toward the costly ER service instead of the urgent care’s flat rate of $250.

• Record Volume at Community Centers: Community health centers are seeing record growth in patient volume, according to the latest HHS data. Community health centers cared for over 31M patients in 2023, up 9% nationwide since the start of the pandemic. More than 90% of those patients had incomes below 200% of the federal poverty line, and included 1 in 8 children in the U.S., 9.7M rural patients, and 1.4M people experiencing homelessness.

• IT Incident Response Blueprint: Duke Health shared a behind-the-scenes look at how it handled the recent CrowdStrike chaos, which impacted 40,000 of the system’s devices. Duke CDO Jeff Ferranti, MD said it was the first time an IT problem caused him to activate the hospital incident command system, which required every affected machine to be decrypted by one of 100 IT volunteers, which takes about five minutes each. Dr. Ferranti detailed an impressive incident response blueprint, which had every machine restored within 72 hours.

• Guidehealth Seed Round: Guidehealth closed $14M in seed funding led by Memorial Hermann Health System to support underserved patients in risk-based contracts. These patients are equipped with AI-enabled “health guides” that help coordinate treatment plans and encourage preventative care, which has reportedly led to positive margins on ~$30M in revenue. Guidehealth also saw a nice boost when it picked up Arcadia’s MSO and VBC business late last year.

• Infinitus AI eBV+: Infinitus Systems debuted its AI eBV+ instant electronic benefit verification solution for patients with commercial health coverage seeking access to specialty medications. eBV+ draws on data from direct integrations with over 1,400 payors and is backed by the Infinitus knowledge graph, which contains up-to-date intelligence on commercial and government payor rules that allows users to collect everything from patient eligibility and provider network status to product coverage information and prior authorization requirements.

• Sonde Cognitive Fitness: Digital biomarker startup Sonde Health launched a voice-based cognitive fitness tracker that monitors brain exertion in real-time using machine learning. Developed alongside researchers at GN Group and Mass General Hospital, Sonde Cognitive Fitness can either passively pick up speech patterns indicative of early cognitive impairment, or deliver a risk score using a 30-second sample recorded using a connected device.

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