January 28, 2021 Update: Lyra Health has submitted documents to the SEC revealing a recent equity financing round totaling $186.7 million.

The COVID-19 pandemic has highlighted and often intensified the existing global mental health challenges. The increasing prevalence of remote work has also contributed to the issue; the reduced opportunities for casual interaction and spontaneous conversations have left many employees lacking valuable in-person connections.

The growing demand for effective solutions has spurred investment in technology-driven mental health platforms. Recently, it was reported that Lyra Health, a company dedicated to providing mental healthcare to workforces, has filed paperwork to secure $175 million in a Series E funding round, achieving a valuation of $2.25 billion.

This information was discovered by the Prime Unicorn Index. While confirmation of the round’s closure is still pending, filings in Delaware typically occur after some or all of the funding has been obtained. Prime Unicorn Index also indicated that the Series E terms include a “pari passu liquidation preference with all other preferred, and conventional convertible,” meaning common stockholders will not share in remaining proceeds. Furthermore, Lyra Health’s latest share price is $27.47, representing an increase from the Series D price of $14.21.

We have contacted the company and its investors for comment regarding this filing. An investor has informed us that the funding round is not yet finalized.

Previous investors in the company include Adams Street Partners, Tenaya Capital, Meritech Capital Partners, IVP, and Greylock.

We are currently observing a trend of rapidly accelerating funding rounds for promising startups. Similar to Discord – which secured $100 million just six months after a previous $100 million raise – Lyra Health recently completed a $110 million Series D round, propelling its valuation above $1 billion.

This effectively represents a doubling of the startup’s valuation within a short timeframe, indicating substantial growth or significant market validation. According to Forbes, Lyra Health was projected to generate approximately $100 million in revenue by year-end at the time of its last funding round.

Several technology sectors have experienced increased usage and interest during the coronavirus pandemic, and notably, mental health and wellness startups – focused on supporting well-being during these challenging times – have been among them. Just recently, the meditation application Calm raised $75 million at a $2 billion valuation.

Lyra Health, headquartered in Burlingame, California, aims to become an integral part of workplace wellness programs. The company assists employers in offering their employees a comprehensive and confidential set of resources to address their mental health needs. This is a sensitive area, as mental health can still carry a stigma in professional environments and employees may hesitate to seek support through their employers. However, with the decline of traditional office benefits, investing in mental health could be crucial for employee retention.

Upon an employee’s enrollment with Lyra, the company develops personalized recommendations based on an initial assessment. Lyra Health then facilitates connections to its extensive network of therapists for appointments, consultations, and ongoing support. This process creates a continuous cycle of care.

Throughout the pandemic, Lyra Health has added 80,000 new users, bringing its total user base to 1.5 million as of the latest report.

The rise of technology-enabled mental healthcare is being fueled by the pandemic’s acceleration of telehealth, as patients seek alternatives to potentially risky in-person doctor visits. Lyra Health has responded by launching Lyra Blended Care, which combines video therapy with online lessons and exercises based on cognitive behavioral therapy principles.