Rose Health, a D.C.-based mental health startup that launched just before the pandemic, is raising millions of dollars in new funding to build up its team in what it expects to be a big year for the business.
The company is raising a $7.5 million Series A round, already with $3.5 million committed, according to Rose founder and CEO Kavi Misri. He’s aiming to close the round at the end of March.
The biggest goal for the capital: To hire up.
Rose plans to more than double its 23-person headcount by adding 34 positions throughout the year, Misri said. That includes clinical, research, engineering, product, customer success, operations and marketing positions. It also means adding sales executives to target new customers this year.
In addition, Rose is looking to bring on licensed clinical social workers, as the company starts offering an in-house team to monitor all of the patients using its platform, Misri said. And the long-term growth plan involves adding C-level executives: a chief technology officer, chief operating officer, chief product officer and chief sales officer.
The $7.5 million would give Rose roughly a year and a half of runway, Misri said, following $2.7 million in lifetime funding up to this point. About 60% of the new financing would support the new hires, another 30% would back research and product development, and the final 10% would fund operations, including expanding Rose’s geographic footprint.
Rose originally intended to raise a $5 million Series A in the fourth quarter of 2021, but “we decided to hold off because a significant amount of new contracts are being signed in the first quarter of this year,” Misri said. That “gave us a lot more strength in fundraising, especially when we looked at improving the valuation,” he said.
The company opened 2022 on an early hot streak, winning Seattle-based Cambia Grove’s annual startup competition — a victory that resulted in work with multiple health systems nationally. It converted a pilot with an accountable care organization (ACO) into a paid contract. And it’s in talks with a “robust pipeline of health systems and payers to generate additional revenue,” Misri said. The business already serves more than 30 physician groups and is focusing mainly on targeting ACOs, or groups of health care providers that offer coordinated care, to improve patient outcomes and cut costs.
Rose is now piloting a youth platform to cater to the needs of adolescents. The company is preparing to run a six-month pilot of that product with Salt Lake City-based Intermountain Healthcare beginning in the second quarter. That will help evaluate the feasibility and efficacy of the youth platform, which involves the people around the kids — parents, teachers, caregivers, primary care providers, psychiatrists and psychologists, among others. Rose will also pilot the product in the third quarter with a large health system in Louisiana, Misri said, declining to disclose details.
The business is projecting about $2.3 million in revenue for 2022 based on existing contracts and its pipeline for this year, Misri said.
Rose helps doctors identify mental health symptoms and get their patients necessary care. The product for adults prompts a user to complete an assessment and journal entry that are run through a language processing algorithm and can detect through semantic tone whether the person is experiencing depression, anxiety, issues with health, relationships or finances, among other things.
Based on the data the patient enters daily, Rose creates a score — think: a credit score for mental health — and issues results as green (mild), yellow (moderate) or red (severe). Those findings help inform whether patients should turn to the Rose app for self-care and coping mechanisms, or make an appointment with the company’s care team. Patients in the red zone get linked with members of the licensed clinical social worker team that monitors the dashboard immediately.
And with one click, all patients using Rose can get connected with members of Rose’s team in less than 30 seconds any day or time. It’s a new function now in a pilot phase with Bethesda-based Yellow Ribbon Fund, a nonprofit that supports military injured during active duty, Misri said. “That’s so significant being able to make a dent in the access-to-care problem that has really plagued the industry for years.”
The business keeps its foot on the accelerator as the mental health space sees continued demand, alongside other companies working to meet it in different ways. “We’re seeing significant momentum given the shift to value-based care and how the current mental health crisis has stressed the system,” Misri said.
Rose Health, one of our 2021 Startups to Watch, launched at the end of 2019 before Covid-19 propelled the business to a fast expansion. Misri, one of the WBJ’s 40 Under 40 honorees, has taken the company through the Halcyon incubator in Georgetown, Johns Hopkins University’s Social Innovation Lab and Johns Hopkins Medicine’s Hexcite medical software accelerator. Rose is an acronym for “recognition of speech and emotion.”
