Demand for mental health services has soared since the start of the pandemic and along with it, the cost to employers. Octave, a behavioral health-care provider, recently announced that it has secured $52 million in funding – led by Cigna, Novo Holdings and Avidity Partners – as it seeks to expand access and reduce costs.
"The demand for mental health services is higher than ever, but our mission is not just to ensure that care is accessible but actually effective for the patient and sustainable for the mental health provider," said Sandeep Acharya, the company's cofounder and CEO. "With this raise, we're aiming to move beyond directly facilitating care, to trying to influence how the whole system functions — how care is paid for, how it is found and the tools we use to support it."
Octave, which was founded in 2018, currently serves 18 million people in California, Connecticut, Florida, New Jersey, New York, Texas and Washington, D.C. Services include adult individual, couple and family therapy. It started as a clinic-based company but now operates hybrid care with virtual and in-person services. It works with both employed and contracted therapists. The new funding will accelerate expansion to more regions later this year and to all 50 states in 2024, as well as the release of new technology products to serve payer and provider partners. This latest round of investment brings the company's total funding to $86 million.
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"I'm grateful to our new investors, all of whom bring a wealth of experience from scaling health-care companies across the private and public markets, for recognizing the unique value we bring," Acharya said. "Our team is excited to partner with them to transform mental health care."
The company also has signed partnerships with major national payers, including:
- Anthem Blue Cross of California,
- Aetna (in all 50 states),
- Health Net and Managed Health Network (in California) and
- United Healthcare UMR plan for Mount Sinai employees (in New York).
Octave's approach differentiates it in the behavioral health market, he said, even as new startups jump into the space fueled by billions in venture capital dollars.
"After billions of dollars of capital investment, a patient is no more likely to complete a course of treatment in therapy than they were five years ago, based on the data," he said. "So what is all this capital doing? It's not necessarily driving more effective care. I think we're all focused on access, but we as an industry need to pivot and focus more on effectiveness.
"That is how Octave is thinking about our journey, where we are seeking not just to be a provider of care but increasingly we're trying to figure out ways to offer technology that will encourage care to be more effective."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
