Two Chairs Raises $72 Million in Series C Funding to Expand Virtual Therapy Services
When Alex Katz founded Two Chairs in 2017, he firmly believed that in-person therapy was the most effective approach for behavioral health. However, when COVID-19 erupted and the world shifted online, the company was forced to reconsider its face-to-face approach.
Adapting to a New Normal: Virtual Therapy Takes Center Stage
The pandemic accelerated the adoption of remote-first treatment models, enabling Two Chairs to grow at an unprecedented rate. The company now operates in three states – California, Washington, and Florida – with at least one brick-and-mortar site in each location. However, virtual therapy has become the norm for over 500 therapists on its platform.
The shift to online therapy has undoubtedly been a game-changer for Two Chairs. By leveraging technology and a proprietary matching algorithm, the company can find the best possible therapists for its clients. This approach has not only improved access to mental health services but also reduced costs associated with maintaining physical clinics.
Raising $72 Million in Series C Funding: A Strategic Move
In a significant development, Two Chairs announced a $72 million Series C equity and debt financing round led by Amplo and Fifth Down Capital. This funding brings the company’s total investment to $103 million. The debt portion of the capital was provided by Bridge Bank.
The recent funding round underscores the growing recognition of virtual therapy as a viable solution for addressing mental health concerns. With this influx of capital, Two Chairs aims to expand its services, hire more therapists, and enhance its technology platform.
A Differentiator in the Market: Employing Therapists Directly
Katz emphasizes that Two Chairs’ approach is distinct from other virtual behavioral health platforms, such as Talkspace and Teladoc-owned BetterHelp. The company employs the vast majority of its therapists directly, allowing for greater control over therapist selection and training.
This unique strategy enables Two Chairs to prioritize quality care and implement measurement-based care (MBC) practices among its clinicians. MBC involves assessing patients’ progress against standard metrics, which can lead to improved outcomes and reduced costs.
However, Katz notes that online psychotherapy is not a panacea for addressing the shortage of mental health professionals in the U.S. While digital platforms have made it easier to find therapists, there is still a significant gap between demand and availability of high-quality care.
The Future of Virtual Therapy: Opportunities and Challenges
As Two Chairs continues to expand its services, Katz acknowledges that the company faces numerous challenges. He highlights the need for more investment in therapist training and education to ensure that clinicians are equipped to deliver MBC practices effectively.
Regarding the potential impact of AI on mental health services, Katz expresses caution. While AI can provide valuable support tools, he believes that human therapists will continue to play a critical role in delivering high-quality care.
Alex Katz’s Perspective:
"While it has gotten easier to find a therapist because of different digital platforms, it’s still just as hard to find the right therapists and really high-quality care. That’s the problem we’re trying to solve."
The Rise of Virtual Therapy Startups: A Growing Market
Two Chairs is not an isolated example in the virtual therapy space. Recent funding rounds for companies like Grow Therapy, which raised $88 million in Series C funding led by Sequoia, demonstrate the growing recognition of online mental health services as a viable solution.
Key Takeaways:
- Two Chairs has raised $72 million in Series C funding to expand its virtual therapy services.
- The company’s unique approach involves employing therapists directly and implementing measurement-based care practices.
- Online psychotherapy is not a replacement for human therapists, but rather a complementary tool for addressing mental health concerns.
Conclusion: A Bright Future for Virtual Therapy
The rise of Two Chairs and other virtual therapy startups underscores the growing demand for online mental health services. As the company continues to expand its services and enhance its technology platform, it is clear that virtual therapy will play an increasingly important role in addressing behavioral health concerns.
Sources:
- Two Chairs Raises $72 Million in Series C Funding to Expand Virtual Therapy Services
- Grow Therapy Raises $88 Million in Series C Funding Led by Sequoia
- The Future of Mental Health: How Virtual Therapy is Changing the Game
Note: The sources provided are for informational purposes only and may not reflect the most up-to-date information.
