Investors are betting on Zocdoc-like mental health startups

The news: Mental health matchmaking startup SonderMind scored $150 million in Series C funding to expand its therapist network across all 50 states.

Here’s how SonderMind works: Consumers access the platform by filling out a questionnaire about their care needs, insurance information, and payment information. Then, they get linked with a mental health provider for a virtual visit, and SonderMind handles billing and insurer interactions on the back end.

Why investors are betting on tech like SonderMind: Consumers don't access mental healthcare services because it’s very difficult to find inexpensive and diverse providers—two things startups like Sondermind are tackling.

Some individuals don’t seek professional mental health services due to high cost barriers. Like Sondermind, competitor Headway connects individuals with a mental health provider based on selections like insurance eligibility—and its cost savings tool helps patients see how much they’d save using its platform versus finding a therapist through their insurer’s website.

Plus, some consumers say it’s increasingly difficult to find a therapist of color who understands their cultural values. To this end, Sondermind’s site prompts patients to request personal preferences (like a therapist from different ethnic backgrounds), while physician-searching tools on payers’ websites like Cigna's have limited options to do the same.

What’s next? There's no shortage of startups with physician- and appointment-booking tools at their core—this is what medical appointment booking giant Zocdoc’s business model is centered on—so, we expect to see a lot of consolidation happening to avoid cannibalization.

• Just last week, Zocdoc partnered with Headway to provide its consumers with more affordable choices—a smart move on newer entrant Headway’s part, considering Zocdoc reaches millions of consumers every month, including partnerships with entities like the City of Chicago.
• As consumer demand for virtual mental health remains high, we could see ZocDoc’s competitors like Sesame Health link up with the likes of SonderMind to gain access to lower-cost, diverse mental health providers.