When Hollywood tackles addiction, the script normally conjures up dingy rooms where unlucky people gather to share their struggles and fears.
By contrast, the dominant enterprise capitalist-funded model offers little in the way of cinematic eye candy. Rather, we focus on startups where people use therapeutic messages and video chats with healthcare providers and use prescription tracking apps.
Visual appeal aside, there is loads of funding available to support this smartphone-based vision. Virtual addiction care startups have raised tons of of hundreds of thousands of dollars for business models based largely on building offerings scalable enough to satisfy the enormous demand for treatment.
Most of the financing activity is very recent.
Just last Tuesday, based in Portland, Oregon Boulder care, a provider of long-term virtual care services for people suffering from substance use disorders, raised $35 million in its latest enterprise round. This 7-year-old startup offers prescription medications and online support infrastructure to assist people with opioid addiction and alcoholism recuperate.
Same day, in Nashville Wayspringprovider of clinical and peer support for people suffering from substance use disorders, announced secured a minority investment under the leadership CVS Health Ventures. Previously, 12-year-old Wayspring raised over $116 million in high-profile enterprise capital funding.
Recent recipients of funds
To get a broader picture of investment direction, we used Crunchbase data to aggregate a list of 14 addiction treatment firms funded over the last few quarters.
In total, the firms on our list have raised $765 million in known financing so far. This does not include potentially large missiles of undisclosed sizes, reminiscent of CVS’s recent investment in Wayspring.
From a demand perspective, it is simple to see why startups offering scalable addiction treatments would find receptive investors. Of Americans requiring drug treatment, it is estimated that greater than 40% do not receive care for one yr questionnaire from the National Council for Mental Well-Being.
Often people forgo care because they do not have access to it. The study found that greater than 80% of adults who received substance use care had difficulty obtaining it. Cost is a major factor, as is the lack of treatment facilities, especially in rural and urban areas where rates of substance abuse are high.
Funded start-ups are addressing each the cost issue and using virtual care to resolve the problem of the shortage of local processing facilities.
These include the largest disclosed funding recipient on our list, In the sea. The New York-based digital drug clinic company closed a $58 million Series C deal in March, bringing its existing funding to $137 million.
Pelago is based on the premise that substance use is a chronic disease that could be treated. It markets itself to employers as a potentially inexpensive treatment option for tobacco, alcohol, cannabis and opioid use disorders.
Drug-based treatment
Medicines are also a core a part of the business model of many funded virtual clinics.
Boulder is a particularly strong supporter, arguing that while medication-based treatment is effective in treating addiction, only about 10% of people that may gain advantage from it have access to it. The startup says it mostly prescribes buprenorphine drugs, used to treat opioid addiction, in addition to drugs used to treat alcohol abuse.
One advantage of the digital clinic approach in this regard is that patients do not lose contact with their providers after the move. Since treatment is digital, all you wish is a smartphone to videoconference, chat and message doctors.
That said, none of us live exclusively in a digital world. Even among virtual care providers, it is common to attach patients overcoming addictions with in-person support groups.
So it looks like basement hangouts for lukewarm coffee and hot conversations will still have a place in the recovery process.