- Talkspace has hired a chief medical officer to help build its enterprise business and start prescribing medicines through the app.
- The company is generating tens of millions of dollars in revenue, the CEO told CNBC.
- It claims to have 1 million users paying for online therapy services.
Talkspace, a start-up that offers therapy via video chat, is getting serious about selling to employers and has just brought on a chief medical officer to help.
Neil Leibowitz, who previously served as senior medical director at UnitedHealth, joined Talkspace this month. His hiring comes as the company builds out its enterprise business and is mulling a potential IPO.
Talkspace, which offers a $79 weekly service for talking to a therapist online or a $49 service for messaging a mental health professional, recently hit 1 million users after more than five years in business, CEO Oren Frank told CNBC. He said the company is generating tens of millions of dollars in revenue.
Now that Leibowitz is on board, Talkspace's physicians will soon be able to start prescribing medicines when needed. The psychiatrists, who are independent consultants, will only be able to prescribe using the video tool due to state and federal regulations. Leibowitz said the company hasn't decided yet if there are any medications it would avoid prescribing, such as opiates.
As an ex-insurance executive, Leibowitz is coming aboard to help bulk up the corporate side of the business, which Frank said he hopes will represent about half of Talkspace's revenue by the end of the year. The company was already getting traction in that area thanks to a partnership last year with employer-focused Magellan Health.
Employers are taking mental health more seriously after studies showed an increase in depression and anxiety among millennials and the impact those issues have on productivity. Frank said that Talkspace's business service gets tested by about 10 percent of a customer's employees, with most opting to try out the messaging service.
Leibowitz said he was "initially skeptical about Talkspace, in part because it represented something new and different." He made the decision to join the company after getting to know the team and the product, which he now views as a way to increase access to therapists.
He was also attracted to its focus on making therapy affordable for anyone with an internet connection. He said the lack of access to mental health workers for people in rural areas is a well-documented problem.
Talkspace has had a rocky few months. The company reported a sevenfold spike in usage following the presidential election. But it hit a road bump after a therapist spoke out about its policy of refraining from stepping in during an emergency situation, like when a child could be harmed. The company implemented a new policy, encouraging therapists to ask for contact information in such cases.
Robert Mittendorff, a partner at Norwest Venture Partners and investor in Talkspace, said that the company has shown that consumers are willing to pay for health services that they find helpful.
"Users are paying for months, and they're actually using it," he said.