Meru Health secures $38M in equity and debt for 'holistic' online mental health platform

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The COVID-19 pandemic has undoubtedly been devastating on many levels. But if there’s any silver lining in the global crisis, it could be that it’s less taboo to talk about feeling anxious, depressed or burnt out. Because chances are, the person you’re talking to is feeling one of those things too.

So it’s no surprise that therapists and psychiatrists alike are struggling to keep up with demand. But not all therapists are created equal and unfortunately, there are psychiatrists out there that can be too quick to dole out medicine to treat a person’s issues.

Meru Health is a startup that aims to solve a number of the challenges associated with getting access to quality mental health care, with what it describes as a comprehensive online mental health solution. Kristian Ranta founded the San Mateo, California-based company in 2016 after his brother, Peter, committed suicide. In his view, if his brother had access to better mental health options, he might not have taken his own life.

As COVID forced people to seek online options for all types of healthcare, including mental health, it’s no surprise that Meru Health grew its customer base by 10x and saw about 700% revenue growth in 2020. And today, the startup is announcing that it has secured $38 million in a Series B round of funding, bringing its total raised since its 2016 inception to $51.3 million. Industry Ventures led the $30 million equity round. The remaining $8 million was secured in debt. Early backers Bold Capital Partners, Foundry Group, Freestyle VC, FMZ Ventures and Leksell Social Ventures also participated in the equity financing, while J.P. Morgan funded the debt portion of the round.

For the first two or three years of Meru Health’s life, Ranta focused mostly on research to determine just how well digital therapy and “old school” psychiatry was working. The evidence out there, he felt, was flimsy.

One of the things the company concluded was that “digital is great but without the human touch, it's not going to get utilization.”

Or in other words, purely app-based solutions just won’t cut it when it comes to treating depression, anxiety and burnout.

“But if there’s no kind of accountability, there or there is no human connection, it’s going to be much harder to keep people engaged and people end up dropping out,” Ranta told TechCrunch.

Today, Meru Health works with employers such as Stanford University and several Fortune 100 and 500 companies, EAPs such as Wellspring and healthcare payers such as Cigna, Humana and Moda Health to provide an online mental healthcare program that it says shows strong and lasting clinical outcomes.

The startup has been able to sell its solution to employers by demonstrating that the benefits of offering the program to employees far outweighs the cost. Specifically, Meru estimates that the average cost savings for an employer for its program is over $6,000 per enrolled participant because the downstream healthcare costs and reduced worker productivity of untreated anxiety and depression are so high.

What’s interesting about Meru Health’s approach is that it aims to be a holistic one -- treating both the mind and body concurrently, rather than just focusing on one thing.

“We learned, for example, if we just do talk therapy, it doesn’t work for all mental health struggles,” Ranta said.

For example, it helps patients with getting better sleep and nutritional coaching because, as Ranta puts it, “sleep is interconnected to mental health.”

“We still haven’t seen anyone else look at the food and mood connection,” he said.

It also provides a wearable device to capture physical biomarkers so people can see the effects of things like deep breathing and “start to control their own response to stress,” Ranta said.

Image Credits: Meru Health

“One of the challenges in mental health grades, but there's just a lot of self report, so we've been bringing in these elements of more objective data capture and also provide feedback for our patients,” he told TechCrunch.

The holistic approach seems to be resonating, and Meru’s plans with the capital include getting fully covered by carriers in more states.

“We are building out our nationwide network, and how to be in 40 states by year’s end,” Ranta said.

The company also, naturally, plans to add to its staff of about 170.

It also intends to continue clinical trials, and “do science properly,” as Ranta puts it.

“We do open data sharing through trials with the best universities and share all the results openly,” he said. “We’re now showing with research that this approach has 3-5x better clinical results than the standard of care in the U.S., and a roughly 80% completion rate, which compares to 30% to 50% in traditional therapy because we engage people dramatically better.”

That engagement caught the eye of Industry Ventures VP Fanni Fan, who said her firm has been following the mental health space for years and “looking to back entrepreneurs leveraging technology to improve access and quality of care in behavioral health.”

Meru Health stood out among its competitors in many ways, she told TechCrunch, including its “exceptionally high engagement and completion rates, strong clinical outcomes validated by long-term clinical studies and three month curriculum coupled with biofeedback that drive engagement and also enable payers to measure outcomes more easily.”

Note: This article was updated post-publication with the addition of an investor name not previously provided

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