Talkspace, the online mental therapy app founded by Israeli couple Roni and Oren Frank, has announced it will be going public through a SPAC formed by Hudson Executive Capital Founder Doug Braunstein. The combined company will operate as Talkspace and intends to be listed on the Nasdaq under the symbol “TALK.”
The deal values Talkspace—which connects users with licensed therapists via video chat or text—at $1.4 billion, including debt. The deal will provide the company with $250 million in cash to be used as growth capital, the companies announced Wednesday.
The transaction is expected to close in the second quarter of 2021. Once the transaction closes, Talkspace will be the first and only publicly traded virtual behavioral health company.
Founded in 2011, Talkspace developed and operates web and mobile apps that connect users with licensed therapists. The company offers digital mental therapy plans through text messages or recorded voice and video messages and also offers advanced speech pattern analysis of the calls.
As reported by Bloomberg, Talkspace is weighing a merger with a SPAC named Hudson Executive Investment Corp. (NASDAQ: HEC). The move would enable Talkspace to raise $200 million and value the merged company at $1.5 billion. In May 2019, Talkspace raised $50 million in a series D round led by Revolution Growth, which brought its total capital raised to $106 million.
Talkspace has seen robust user growth, with tens of thousands of active members and more than 39 million lives covered by employer or healthcare insurance agreements. Like many digital mental health providers, Talkspace has seen accelerated growth during the COVID-19 pandemic as the health crisis drives up stress levels and exacerbates existing mental health issues.
In the U.S. alone, it is estimated that more than 70 million people suffer from some form of mental illness and that less than half of people with a behavioral illness receive care because of cost, lack of access or stigma, according to Talkspace.
“Roni and I started Talkspace nine years ago to establish a next-generation technology company, exclusively focused on behavioral health, with the mission of opening up access to mental healthcare, improving clinical outcomes, and helping those in need live happier and healthier lives,” said Oren Frank in a statement.
“Today, this mission is more important than ever before. We are proud of the positive impact Talkspace has made and are excited for the next phase in the company’s journey. Hudson Executive’s experience and relationships in healthcare, expertise in capital markets, and alignment with our mission will be invaluable as we continue to grow, innovate and improve mental health outcomes,” Frank said.
The company offers the services of thousands of therapists and features celebrities like Olympic swimmer Michael Phelps and singer Demi Lovato, who in September was announced as the company’s Mental Health spokesperson, among its clients. Firstime Ventures, Norwest Venture Partners, Qumra Capital, Spark Capital, Revolution Growth, and Compound Ventures have all invested in the company.