A Startup Company Right When You Need It
With over 46,000 active users and over 2 million clients served, the New York-based digital therapy business resides at the forefront of its industry. The startup company founded by Oren and Roni Frank is flourishing during a period when its services are most needed. As the CDC aptly stated, “pandemics can be stressful.” The deal with HEC reinforces not only the need for Talkspace but also the immense potential for growth.
According to a report by Verified Market Research, the global telehealth industry, valued at $21.17 billion in 2019, will be worth an astounding $71.44 billion by 2027 at a compound annual growth rate (CAGR) of 16.4%.
The Future of Digital Behavioral Health
“We set up our SPAC looking for businesses that have sustainable competitive advantage and can get there using technology,” HEC founder Doug Braunstein said. “And what is unique about what Oren and Roni built, is that it is a purpose-built technology company really designed to meet the unmet medical needs in behavioral health. And it does so by improving access. It actually reduces cost to the consumer, it improves outcomes, and it's a really powerful platform for clinicians and payers."
According to a poll of Talkspace’s users, 80% reported that the startup business’s therapy was more effective than face-to-face therapy, and 98% reported that the therapy the business provides is more convenient than face-to-face therapy.
Under the terms of the merger, the company will operate under the name “Talkspace” and value the virtual mental health startup business at an impressive $1.4 billion. Additionally, $250 million will be provided for the purpose of growing the company.
Talkspace demonstrates very promising numbers for its business. According to their investor presentation, net revenue grew at a 60% CAGR from 2017 to the expected 2020 revenue and is projected to increase at a CAGR of 57% over the next three years.
Furthermore, the company boasts the highest brand awareness compared to its competitors, including Dr. On Demand, MD Live, Teladoc, and Betterhelp.
“We were looking to dramatically expand our reach and our ability to help many more people,” Oren Frank said in an interview with CNBC. “The real reason we went with that is who they are as people. As I would say, an organization that is very much aligned with what we want to achieve, also known as 'chemistry.' It was essentially a decision about the people at the end of a very long process.”
About the Author
James White is a Michigan State University graduate with a B.S. in Environmental Biology. He is interested in reporting emerging trends in technology, especially with regard to alternative energy and environmental conservation.