According to a person familiar with the situation who asked not to be identified because they were discussing private information, the deal values Alma at around $800 million.
A growing number of venture-backed startups are attempting to meet the increasing demand for mental-health treatment, a trend exacerbated by the pandemic. Alma, founded in 2017 by physician Harry Ritter, aims to help solo practitioners maintain their practices and join major insurance networks.
"How can we help these amazing humans, most of whom are small business owners, be more successful in today's health-care system?" he asked.
Alma charges mental-health providers a fee to join, and the company earns transaction fees on the patient visits it facilitates. Alma has 8,000 mental-health professionals on board and has agreements with insurers such as Cigna and CVS Health Corp. and UnitedHealth Group Inc. that therapists can use.
Historically, getting mental health care covered by health insurance has been difficult. Insurers sometimes impose limits on mental health care that do not apply to other types of medical care, and their provider directories are notoriously inaccurate, making it difficult to find clinicians accepting new patients. Many practitioners only accept cash-paying patients.
According to Ritter, insurers are undergoing a "fundamental shift in attitude toward and appreciation of the importance of mental health care."
Alma is being used by health insurance companies to increase their supply of mental-health professionals. Customers of Cigna "need more care in the behavioral health space than is currently easily accessible in the marketplace," according to Tom Richards, Cigna Ventures' leader.
Alma is also backed by Optum Ventures, a division of UnitedHealth. With the new funding, the company has now raised approximately $220 million.
Startup Scrutiny
The rapid growth of online mental-health startups has brought some of their practices under scrutiny. Some pharmacies and insurers have cut off services to companies such as Cerebral Inc. and Done due to concerns about how their clinicians prescribe controlled substances. While Alma has some doctors and nurse practitioners on its platform who can prescribe medication, Ritter explained that prescriptions are handled outside of the platform and that the company does not dispense medications.
Alma, according to Ross Devor, a partner at Thoma Bravo, is a "three-sided marketplace" that benefits patients, clinicians, and insurers. As access to behavioral health care expands, the technology will be able to "capture data around outcomes that will elevate the care payers fund and, hopefully, reduce their overall cost of care," he said in an email.
Ritter, a former Oscar Health employee, founded Alma with the intention of providing shared physical spaces for therapists to meet with patients, as well as software and a community to support their businesses. When Covid shut down in-person visits, Alma had just opened its second location in New York City.
Mental health care quickly moved online and has largely remained so. While there was little behavioral health care delivered online in the United States prior to Covid, the Kaiser Family Foundation estimates that 40% of outpatient visits for mental-health and substance-use disorders were virtual during the first months of the pandemic. In the year that followed, this proportion only slightly decreased.
Alma closed its physical locations during the pandemic, losing approximately 65% of its revenue, according to Ritter. Virtual sessions now account for 90% of all sessions booked through Alma.
Ayana Ali, a licensed clinical social worker in Brooklyn, New York, ran a part-time therapy practice for 16 years while working full-time elsewhere. When her job at a labor union was eliminated in January, she went full-time into her practice. It was only possible, according to Ali, because of Alma.
For the first time, the company allowed her to accept insurance. It also connected her with patients in her target demographic: professional women of color dealing with severe anxiety or the loss of a pregnancy.
"Alma gives you opportunities to exist in your niche in ways I've never seen before," Ali said.