Grow Therapy raises $88M to revamp mental health and the MSO playbook

The private healthcare clinic is broken. Across disciplines, physicians, nurses, therapists, dieticians, and all manner of specialists are overwhelmed. They’re smothered by long hours and endless administrative work, while only taking home a fraction of what they’re billing. They need a new approach to lower overhead, simplify their back office, and regain control of their professional lives.

Grow Therapy is pioneering the way with its Managed Service Organization (MSO) model. It’s improving the entire mental healthcare experience by offering therapists software to run their practices on their own terms, access to insurance coverage by top payors, and a pipeline of patients through its therapist matching site. Just since 2020, it’s supported over 3 million patient encounters, provided by more than 12,000 providers through partnerships with more than 75 payors. 

SignalFire led Grow’s Series A back in 2021, recognizing the potential of its business-in-a-box platform to modernize how therapy is delivered and the power of its founding team, led by CEO Jake Cooper, Alan Ni, and Manoj Kanagaraj. Top-tier growth and healthcare firms TCV and Transformation led its Series B as it expanded to more and more states. And today, Grow Therapy announced it raised an $88M Series C led by Sequoia to make value-based care the standard for mental health.

A win-win-win for patients, providers, and payors

The world is waking up to the benefits of therapy. Destigmatization, plus the brutal conditions of the pandemic, led to a doubling of demand for mental health services. With Zoom becoming part of our daily lives and most healthcare visits shifting to telemedicine, patients also grew accustomed to receiving support virtually. 

But with demand and access booming, the supply of therapists couldn’t keep up: 55% of U.S. counties don't have a single licensed behavioral therapist. Many therapists felt trapped in large practices, often owned by private equity firms, where they couldn’t control their schedules or what conditions they treated, and they struggled to keep up with paperwork. Those who longed to start their own practice were daunted by the challenges of getting credentialed, negotiating payor rates, and setting up an electronic health record system. 

Payors also have been faced with crisis-level supply-demand imbalances as they’ve tried to extend access. They were eager to find a new supply of therapists and became much more willing to partner with startups that could provide them—especially for rural markets and disadvantaged populations too often shut out of mental healthcare. Payors didn’t just need more “find a therapist” directories; they needed practice enablement technology to make it easier to start practices and provide more care with the same number of clinicians.

Solving these problems is the exact strength of Grow Therapy’s MSO model. Payors get a differentiated supply of therapists to offer their patients in-network. Those providers can more easily start and run their own practices, while Grow handles credentialing, RCM/insurance billing, patient scheduling, and follow-up, note-taking, and marketing. That lets therapists concentrate on delivering the best possible care while shifting from in-office rigidity to a fully remote, pick-your-own-hours model.

Most importantly, Grow has democratized access to therapy. Patients can visit its site to use its AI-powered matching system to find the perfect therapist who understands them and is covered by their insurance. And that’s good for the entire system. When people feel mentally supported, they’re happier, more productive, and can better focus on their overall health. 

Supporting Grow and the next generation of MSO startups

SignalFire is looking to invest in more MSO startups after seeing Grow demonstrate that therapy was a logical first specialty where the model could succeed at scale. Care can be administered entirely virtually without complex in-person care, there’s relatively limited SKU and billing complexity, appointments are frequent with strong retention, and it’s a huge cost driver for health systems and payors with an acute supply-demand imbalance.

Now Grow is taking the model to the next level, uncovering a highly defensible structural advantage. By promoting consistent, evidence-supported care with the right patient engagement, deployed through EHR and other care coordination protocols with full analytics support, Grow is proving mental health can thrive as value-based care. Aligning outcomes with payors while providing high-quality therapy is a win for patients, clinicians, payors, and the MSO model. Congratulations to Grow Therapy and its whole team on this milestone, and welcome aboard to our friends at Sequoia.

It’s been a privilege for SignalFire to support Grow Therapy’s mission with our wide range of value-adds. Our team used the Beacon AI system we’ve been building in-house for a decade to find job candidates for Grow’s most important roles. SignalFire’s HR experts helped Grow build out its employer brand, interview templates, and compensation plan. Our in-house recruiters dedicated their attention for weeks to finding the company a head of growth.

Beyond our help with talent, SignalFire’s deep experience in healthcare let us make introductions to payors and other industry leaders that most generalist VC firms couldn’t offer. That includes CEOs and executives from Cigna, CVS, Walmart Health, and Magellan Behavioral Health. Upon leading its Series A, SignalFire’s Josh Constine, former Editor-At-Large of TechCrunch, and I helped Grow build out its PR messaging, connect with journalists, and do interview prep that resulted in coverage from our top-choice news outlets. Between our scalable AI technology and the full-time experts we have on staff, we strive to be the most valuable investor on every portfolio company’s cap table.

Now we’re looking for more incredible MSO-style startups in other specialties. For example, we recently led a $15.7 million round for Moxie, a business-in-a-box suite for starting medical spas in the booming injectables market. We see MSOs as a way to expand and improve service to customers and patients, improve the pay and working conditions of providers, and for healthcare, help payors boost satisfaction while reducing co-morbidities.

If you’re a founder reinventing your vertical with this MSO model, we’d love to invite you to join us at an upcoming SignalFire event on the MSO playbook. Register here! We’re just at the start of tech-enabled infrastructure improving the quality of care across so many specialties.