Mental health care startup NeuroFlow has acquired Northern Virginia's Capital Solution Design, a software company which counts the U.S. Department of Veterans Affairs as its main client.
Financial terms of the deal were not disclosed.
The acquisition continues NeuroFlow's ties to the U.S. military and its veterans while allowing the Philadelphia company to expand its reach. NeuroFlow CEO Christopher Molaro, who served five years in the Army, co-founded the company as a way to better connect veterans and civilians alike to mental health care. With the VA as Capital Solution Design's "marquee" client, NeuroFlow co-founder and COO Adam Pardes said there is "a massive amount of growth potential given that it is the largest health system in the U.S."
Capital Solution Design, which has a team of four employees at an office in Arlington, will become a wholly owned subsidiary of NeuroFlow. The company's mental health care technologies Behavioral Health Lab and Behavioral Health Lab Touch help track patient progress, monitor symptoms and adjust treatment plans accordingly. Similarly, NeuroFlow's platform can track patients' moods, pain levels and sleep through self-assessment.
Capital Solution Design was founded in 2004 and has worked with the VA for about 15 years. While the company has other health care clients, the federal agency makes up the overwhelming chunk of its business. In total, Capital Solution Design's technology is in over 100 VA health centers nationwide, according to Pardes.
Pardes said NeuroFlow has been aware of Capital Solutions Design's product and had discussed partnerships in the past. Talks of an acquisition began to heat up over the last year.
"This was a one-plus-one-equals-five kind of scenario," Pardes said.
The acquisition gives NeuroFlow a chance to have a substantial presence both with active duty military members and retired veterans.
"It provides a really exciting bridge potentially to some of our active duty Department of Defense work," Pardes said. "Of course a big opportunity in the space is that transition between active duty and retirement to veteran status, so we think this sets us up well on both sides of that bridge."
NeuroFlow landed a $1.5 million contract in 2020 with the Department of Defense to roll out its technology at several Air Force bases. The company was named a winner of the VA's Mission Daybreak challenge in February to help develop suicide prevention strategies for veterans and received $500,000.
In the past year, the company moved into a 16,000-square-foot office in Center City to allow capacity for a staff that has grown to over 100. It will now add an office in the Washington, D.C., area. NeuroFlow has raised some $57 million since its founding in 2017, including $25 million in October.
Among NeuroFlow's client list are Prudential, Trinity Health Mid-Atlantic and Jefferson Health. In the past two months, it has added new partnerships with Emory Healthcare, Atlantic Health System and Novant Health.
