Two Chairs raises $72M Collection C in fairness and debt to scale its therapist community

When Alex Katz based Two Chairs in 2017, he firmly believed that in-person remedy is the best for behavioral well being.

Two Chairs used expertise — a proprietary matching algorithm — to search out the absolute best therapists for its shoppers, however remedies passed off primarily inside one of many startup’s half a dozen stylishly designed clinics positioned in prime places all through the San Francisco Bay Space.

However when COVID-19 erupted and the entire world moved on-line, the corporate was compelled to rethink its face-to-face method. Whereas Two Chairs now operates not less than one brick-and-mortar website in every of the three states — California, Washington and Florida — it serves, nearly all of the corporate’s greater than 500 therapists deal with shoppers nearly.

The adaption of the remote-first therapy mannequin has possible helped the corporate to develop quicker (and definitely much less expensively) than it will have had it continued to emphasise seeing sufferers in particular person. Two Chairs says its income expanded eight-fold over the past three years.  

On Tuesday, the corporate introduced a $72 million Collection C fairness and debt financing led by Amplo and Fifth Down Capital, bringing Two Chairs complete funding to $103 million. Amplo additionally led the corporate’s $22.5 million Series B in August 2019. The debt portion, which comprised the minority of the most recent capital, was supplied by Bridge Financial institution.

Two Chairs is likely one of the newest remedy startups to lift substantial funding rounds. Final week, Develop Remedy, a three-sided psychological well being platform for therapists, payers and sufferers, raised an $88 million Series C spherical led by Sequoia.

Katz says that the first distinction between his firm and different digital behavioral well being platforms, together with Talkspace and Teladoc-owned BetterHelp, is that Two Chairs employs the “overwhelming majority” of its therapists whereas most rivals contract with their clinicians. “That permits us to pick therapists that we expect are actually prime quality, after which we are able to practice them on how one can use measurement-based care,” he defined. Clinicians who use measurement-based care (MBC) may enhance outcomes and scale back prices by assessing sufferers’ progress in opposition to commonplace metrics, however solely a small portion of therapists use MBC of their apply, in response to Katz.

Availability of distant remedy from impartial clinicians, established establishments and startups like Two Chairs has been serving to remedy the scarcity of psychological well being professionals within the U.S., however Katz says that on-line psychotherapy shouldn’t be the panacea.

“Whereas it has gotten simpler to discover a therapist due to totally different digital platforms, it’s nonetheless simply as arduous to search out the best therapists and actually high-quality care, and that’s the issue we’re attempting to resolve,” he stated. “We nonetheless have way more demand than we are able to serve.”

Two Chairs will use its new capital to rent extra therapists, broaden into new states and enhance its expertise. The corporate at the moment provides its providers for the worth of a co-pay to Aetna and Kaiser Permanente medical insurance holders and expenses $226 a session for different people.

As for whether or not AI may in the future substitute psychological well being professionals, and due to this fact make a enterprise like Two Chairs much more efficient, Katz wasn’t so positive it’s doable anytime quickly. “It’s such a human, emotionally pushed job, and that’s solely doable [to do well] with an incredible therapist within the room,” he stated.