Six months after announcing its plans for a public exit, digital mental health company Talkspace is finally hitting Nasdaq via a special purpose acquisition company (SPAC) merger with Hudson Executive Investment Corp. The deal is expected to give Talkspace $250 million of growth capital.
The opening day price per stock was listed at $8.90, and upon listing, the company had approximately 152 million shares outstanding.
Founded in 2012, Talkspace offers virtual therapy. Patients are able to take an online assessment and then find a therapist that meets their needs. A user can choose from different options based on need and budget and then begin to message their therapist.
As part of this deal Talkspace’s cofounders Roni and Oren Frank will continue to head up Talkspace. Hudson Executive Investment’s Douglas Braunstein will be the chairman of the board of directors.
WHY IT MATTERS
This new deal will give the company more money in growth capital, which it plans to use to expand geographically and in scope in order to cover more conditions. Talkspace reports that the company is currently seeing rapid growth. In its Q1 earnings, it reported a 144% year-over-year revenue growth.
“As a public company, we believe we will be able to further enhance access to high-quality mental health services, lowering cost and improving clinical outcomes at scale,” Oren Frank, cofounder and CEO of Talkspace, said in a statement.
“Mental health is increasingly recognized as an essential need, and we believe Talkspace’s unique ability to treat a wide spectrum of acuities is pivotal to address the vast, unmet and growing demand for behavioral health services in innovative ways. Hudson Executive is an invaluable partner that will bring extensive expertise and relationships to Talkspace and will contribute to advance our mission.”
THE LARGER TREND
Over the last year, Talkspace has been busy. In November the company acquired relationship-counseling startup Lasting for an undisclosed sum. At the time of the announcement, Talkspace president Mark Hirschhorn told MobiHealthNews the expansion into relationship therapy came about organically and the need was exacerbated by the COVID-19 pandemic.
The company also landed an NIH grant to conduct telepsychiatry research in January.
Last August, Talkspace did come under fire when a former employee spoke to The New York Times about session-transcript data-mining practices, as well as App Store and Google Play review inflation.
Talkspace has a lot of competition in the digital mental health space. Rock Health reports that behavioral health starts scored a whopping $2.4 billion in 2020. However, as Rock Health notes in the report, the bulk of digital mental health companies remain private companies. There is also a growing list of general telehealth companies, including Teladoc, Amwell and Hims & Hers, that have gone public.