Virtual mental health company Brave Health scooped up $40 million in a Series C funding round led by Town Hall Ventures.

Existing investors, including Union Square Ventures and City Light Capital, also participated, bringing the startup's total funding pot to $60 million. Brave last announced a $10 million Series B about a year ago.

WHAT IT DOES

Brave provides virtual therapy, psychiatry and medication management for mental health concerns and substance use disorders. The company, which launched with health plans in Florida in 2019, focuses on the Medicaid market.

Brave now offers services in 18 states, and earlier this summer announced it had entered into its first value-based care arrangement with Molina Healthcare of Texas. It also recently partnered with the Doula Network, a service that pairs pregnant Medicaid patients with doulas in order to offer maternal mental healthcare.

The virtual mental healthcare provider said it will use the capital from the Series C round to add more value-based care contracts, expand in new and existing markets, and continue to build out its technology and data infrastructure. 

"Innovation in Medicaid care delivery and reimbursement models is critical for our healthcare system," Anna Lindow, cofounder and CEO of Brave Health, said in a statement. "Today, we're energized by the enthusiasm from our forward-looking investors and health plan partners around this aim."

MARKET SNAPSHOT

Mental health continues to be a leading clinical area for digital health investment as the country manages the impact of the COVID-19 pandemic and a shortage of mental health clinicians. 

According to an issue brief by the Kaiser Family Foundation, Medicaid plays an important role in providing access to behavioral healthcare. In 2020, the program covered 23% of nonelderly adults with a mental illness, 26% of them with a serious mental illness and 22% with substance use disorder. Medicaid covered only 18% of the general nonelderly population.

Another teletherapy and psychiatry company, Sensible Care, recently raised $13 million in Series A funding. It plans to use the investment to expand in states with large populations of patients covered under TRICARE, health plans for military service members and their families.

Iris Telehealth, which offers virtual therapy and psychiatric care through partnerships with providers like health systems, hospitals and community health centers, announced a $40 million Series B this spring.