Cooper’s Take: On-Demand Mental Health Care Gains Traction

Originally published on WSJPro

By Laura Cooper

Patients have become accustomed to doctor-on-demand services—and private-equity firms have taken notice.

With companies such as Teladoc Inc., which provides access to doctors via videoconferencing and calls, becoming more commonplace, it is no surprise that the idea of on-demand behavioral health services is attracting investor attention, too.

Unlike Teladoc, which primarily caters directly to patients, InSight largelyserves hospitals, community mental health centers, correctional facilities and substance-abuse treatment centers, providing on-demand psychiatric consults through videoconferencing. The company also operates a direct-to-consumer division that provides psychiatric and related services to individuals in their homes or private settings.

The move into on-demand behavioral health is a natural one for private-equity firms, which have embraced technology-enabled health-care offerings and poured money into many different facets of behavioral health.

“I think the space makes a lot of sense for a number of reasons,” said Michael Siano, a director at the investment bank Houlihan Lokey who focuses on the health-care information-technology space. “At a high level it’s one of the most under diagnosed and capacity constrained areas of health-care in my opinion. That’s why it’s really efficient and important to have on-demand mental health services.”Consumer-based, technology-enabled mental health care is drawing venture-capital interest, too. Last year, Talkspace—which operates a messaging platform that connects patients to therapists and counts Michael Phelps as its spokesman—received a $31 million Series C funding round from several venture investors.With both the behavioral health and technology sectors intriguing to investors, it is possible more private-equity firms will pursue deals in the on-demand behavioral health space over the course of the coming year.

Write to Laura Cooper at laura.cooper@wsj.com