Harry Ritter stood with a group of therapists in the newly renovated coworking space that his company Alma had just renovated days before pandemic chaos hit the world. In Manhattan’s Midtown, the office was part of a membership that allowed private practitioners to see patients in an open and airy space. The monthly fee allowed members to access scheduling, billing, and client-matching software. It automates many of the usual administrative headaches. In March 2020, only 5 percent of Alma’s 200 members of therapists could see patients remotely.
Coworking revenues dropped 65% almost instantly as revenue from them plummeted. Alma founder and CEO Ritter, 36, says that they lost all the money almost overnight. “We had to make a quick and significant investment in virtual care support.
Alma has made a significant change in the last year. It closed two New York therapist offices and spun up virtual technology. It also doubled its health insurance business. Alma brought along investors. Ritter states, “I believed that mental health was more crucial than ever before.” Alma has come to a long-distance since that awful first half of 2020. The company’s revenue is now 13 times higher than it was in April last year, and the number of therapists who have signed up for Alma continues to rise by between 30-40% each quarter. The company announced on Tuesday it raised $50 million Series C rounds led by Insight Partners. Insight Partners also led its $28 million Series C round in February. Optum Ventures was represented by Tusk Venture Partners and Primary Venture Partners. Sound Ventures participated as well as Rainfall Ventures. The company has raised $90.5million to date.
Venture capital has surged into behavioral healthcare startups as a result of the Covid-19 pandemic. This was in response to the rising number of Americans with anxiety and depression. Fast Company reported last week that Ginger, an online platform for accessing therapists and mental health coaches, merged into meditation app Headspace in a $3B deal. Lyra Health was valued at $4.6 million in June. It offers employers mental health benefits. Each company has a other approach to the same problem: outdated and ineffective mental health insurance directories.
We like the idea of a business that isn’t just rational and logical but also has soul and heart.
Ritter was raised in a family of doctors and assumed the same fate. Ritter tried out some entrepreneurial ventures during medical school and college. He described the first one as a “Facebook meets Tumblr” blog platform for college students. Later, he learned how to code and set up a social network to help medical students. He recalls, “I discovered that you need to build great products.” Ritter remembers that it’s not enough to be a doctor and try to code. Ritter moved to corporate America to work as a consultant for McKinsey. Soon after, Ritter joined Oscar Health, a New York-based public health insurer, when it was still in pre-revenue. He then went to law school. Ritter, an Oscar employee, helped to open the Oscar Center for primary care and behavioral healthcare. Ritter recalls that the center had to hire an intern responsible for searching the provider directory to locate in-network therapists to refer to within two days. This experience and his understanding of the value and importance of therapy led Ritter to decide to help solve the accessibility problem of connecting fragmented independent therapists. In 2017, he decided to leave to pursue a different goal: giving therapists the resources they need to run a successful practice.
Alma helps with this. One of its biggest draws is the software’s ease of use for patients and therapists. The biggest draw for therapists is the relationship it has with the health insurance sector. Many therapists refuse to take out insurance because insurers’ rates are too low, and they don’t cover all administrative overhead. Alma’s software cuts down on administrative expenses. The company also contracts directly with insurance companies on behalf of its members. The software is beneficial for both insurers as they can verify and select quality providers. It also benefits therapists since Alma negotiates rates on behalf of the group. In addition, providers are paid in two weeks rather than waiting for months to process claims. Because of the better rates and overhead costs, providers can afford to offer insurance coverage. This allows more patients to come to them.
Hilary Gosher is a managing director of Insight Partners and a member of Alma’s board. Alma focuses on helping therapists run small businesses while also helping insurance companies direct their members towards quality providers, she said. Gopher states that every client wants a therapist who cares about their well-being and not how to run a business. Alma is a great therapist because she takes care of everything.
Alma’s patient match services is another essential piece, Gosher explains. The algorithms match patients to the right therapists using data collected from patients. This is significant because most people have to visit three therapists before finding the perfect match. Alma’s technology helps to reduce that number. Even though patients have to see more than one therapist, the average retention rate for the company is 90 percent.
It all started in the tri-state region. Today, therapists are licensed to offer virtual care in 25 states. In-person care is available in eight states: New York and New Jersey, Connecticut, Massachusetts, and Florida. (Providers may be licensed in more than one state. Alma will concentrate on expanding the mid-Atlantic region and the East Coast this autumn. Additional expansion is planned for 2022. Although they are avoiding office spaces, “We do not plan to return to reopen physical space, at least not until more information is available about the future vision of Covid.” Ritter admits that it is difficult to predict what the future looks like in this industry, considering the behavioral shift.
Humaira Naushad, one of those Alma-using therapists, is also a user. Alma was her first professional step. She had no idea she would be able to start her own business so soon in her career. She worked in a substance abuse clinic as a mental counselor after she graduated from Touro College. She had always wanted to start her private practice but realized it would take five additional years. “I believe telehealth motivated me to know that this is possible,” she said. It gave her the freedom to work from home without having to worry about renting office space. Alma took care of insurances, which she said helped to reduce the administrative burden. Naushad currently meets with clients approximately 15 to 20 times per week. She said that she will always be able to do telemedicine. “But in the future, hopefully when Covid is over, I would want to go in person, maybe two or more days.”
Alma is still occupying a Brooklyn-based coworking space but doesn’t intend to reopen the area anytime soon. Ritter is confident that virtual healthcare will continue to be a viable option, regardless of what the future brings. “It makes great difference to be able to see a therapist fairly quickly,” Ritter says. “The network’s diversity and the number of options for patients makes a huge difference,” he says. While 84% are white, 30% of Alma providers identify as Black, Hispanic, or Asian. 10% identify as Asian. The new funding will allow the organisation to invest in technology to provide better care.
Better care is what Alma was founded on. According to Ritter, the word itself can mean two things, including Latin “soulfulness.” He said, “We like the idea of being in a business that’s not only about reason and logic but also about soulfulness and heart.” Alma, which is Aramaic, an ancient Mesopotamian language, means “world” in Aramaic. Ritter believes that Alma aims to “bring soulfulness into the world by helping people with mental health.”