Chicago-based Regroup Therapy, which lets mental health professionals virtually meet with patients at a variety of institutions, has raised more than $6 million in Series A funding, it announced Thursday.
It has been a period of notable growth for Regroup, which was founded in 2011 and bootstrapped until last year.
Revenue at the telehealth company is up significantly since it raised its $1.8 million seed round in April 2016, said CEO and founder David Cohn. It currently has more than $4.5 million in annual revenue under contract, whereas early last year its annualized revenue was about $100,000, he said.
“(We) have a health care system that is increasingly incentivized to provide better care earlier for patients,” Cohn said. “You can’t do that without providing high-quality mental-health care earlier.”
Regroup currently has 15 full-time employees. Cohn said he plans to use the funding to grow to 30, in roles including new business and clinical deployment. Those in the latter group travel to sites such as hospitals and prisons to integrate Regroup’s tools with the facilities’ existing technology.
The company works with a network of more than 3,000 psychiatrists and social workers who video chat with patients from a distance, and can also securely view and share patients’ health information.
Regroup’s almost 30 clients commit to work with the company for a year and pay per hour of care, with mental health workers receiving a portion of each fee, Cohn said. Clients include the Cook County Department of Corrections and OSF Healthcare, a Peoria-based health care system.
OSF Healthcare led the more than $6 million round, with participation from Chicago investors Hyde Park Angels, OCA Ventures, Furthur Fund and Impact Engine. Boston-based HLM Venture Partners also participated.
Cohn would not comment on what he expects for Regroup down the line, saying only that his long-term goal is to increase access to mental health care.
In 2015, another telepsychiatry company called 1DocWay was acquired by Genoa, a pharmacy chain that serves behavioral health and addiction needs, for an undisclosed sum.
Sapan Shah, deal lead for Hyde Park Angels, said he hopes to see Regroup grow “geometrically” over the next couple of years. He is also president of Flagship Healthcare, a medical malpractice insurance brokerage, and holds a J.D. and M.D.
If the company continues on this trajectory, Shah said he thinks it could go public or be acquired by a health care company or even a staffing firm.
“I’ve been impressed with their ability to sell across a wide range of facilities,” Shah said. “So you kind of get an idea of how broad the need was and how broad Regroup can be.”
Read more at the Chicago Tribune