After an international merger, a Kentucky startup is gearing up for what’s next.
BehaVR, an Elizabethtown, Kentucky-based health tech company, develops virtual reality therapeutic treatments for mental and behavioral health.
At the end of last year, BehaVR and OxfordVR, an Oxford, England-based company, merged in a transaction for an undisclosed amount. The combined company now operates under the BehaVR name and is led by Aaron Gani, its founder and CEO.
The merger also came with a $13 million Series B capital raise, led by Optum Ventures and Oxford Science Enterprises, with participation from San Francisco-based Accenture Ventures, and Confluent Health, Chrysalis Ventures, Thornton Capital and Future Labs Capital, all based in Louisville.
To date, the combined company has raised $50 million in total funding. Post-acquisition, BehaVR employs 48 people, nine of whom are in Kentucky. Gani declined to share the company's annual revenue.
The merger has been a natural fit, Gani told me, because both companies were fundamentally complementary.
BehaVR’s offerings include treatments for anxiety, depression, pain and opioid use disorder. OxfordVR specialized in serious mental illness (SMI) treatments. Gani said this rounded it out, adding BehaVR had a platform and OxfordVR didn’t.
“We’re not a tech company dabbling in health care,” he said. “We are a health care company building digital therapeutics for mental and behavioral health, for this chronic medical morbidity of chronic disease meets mental health.”
Both companies had investors that were health-focused as well.
BehaVR focuses on the intersection of chronic conditions and mental and behavioral health care, some of the most at-risk patients, Gani said.
“That’s in a sense the hardest part of health care,” Gani said. “But it’s also the biggest pay off in health care.”
He said this focus was informed by his years at Humana Inc. (NYSE: HUM), taking an approach to make members healthier, specifically those with multiple conditions. Prior to launching BehaVR in 2016, Gani was chief technology officer at Humana.
BehaVR remains based in Elizabethtown, but the combination now gives it a presence in the United Kingdom. It also accelerates BehaVR’s work with the National Health Service, England's publicly funded health system.
OxfordVR recently received $500,000 from the U.S. Department of Veterans Affairs, as a part of its Mission Daybreak challenge, a $20 million program meant to build new suicide prevention strategies for veterans. The grant allows the combined company to continue to develop virtual reality solutions to address mental and behavioral health challenges in support of veterans.
The Oxford company had applied for this challenge prior to joining BehaVR. Now, the joint company will continue the work, which includes addressing agoraphobic avoidance, post traumatic stress disorder and traumatic brain injury, Gani said.
Meanwhile, BehaVR is partnering with Confluent Health, one of its key investors, to offer its VR programs around chronic pain and musculoskeletal care to Confluent’s clinicians. Confluent partners with physical therapy clinics across the nation and provides back-office support to them.
BehaVR already has a presence in some of Confluent’s locations with its neuroscience products. In the third quarter of this year, Gani expects to announce a product related to Confluent’s moviMSK, a technology approach to musculoskeletal care.
In the fallout of the Silicon Valley Bank collapse earlier this month, Gani said BehaVR is anticipating a tighter market in terms of venture capital, but BehaVR wasn’t exposed to that bank. In the near term, BehaVR isn’t seeking more funding.
“We believe it’s always been true to focus on value creation, but especially now, we anticipate a tough capital environment to persist for a while,” Gani said. “We’re very, very focused on creating value through our products.”
