In Footwork’s first year, there are two themes that we’ve spent a lot of time seeking out new investments in: Empowering Entrepreneurship and Addressing The Mental Health Crisis. Today we’re announcing an investment at the intersection of both, in Heard, the financial back office for mental health professionals. But first, a little background on why these have been thesis areas of such interest to us:
We believe that entrepreneurship is one of the most powerful forces for positive progress on the planet. That’s why we took the leap ourselves as entrepreneurs to found Footwork, and why we love our role as venture capitalists: believing in and supporting entrepreneurs.
It turns out that we’re not alone. Much has been written about The Great Resignation, with 48 million Americans estimated to have quit their jobs in 2021, continuing into 2022 with January recording 4.3 million people quitting. But the unemployment rate has kept steadily falling (3.6% in March 2022) since a peak a few months into the pandemic. And the number of monthly new business applications has risen dramatically since the start of the pandemic, with elevated levels ever since.
The data above from the US Census led Fred Wilson to name this pandemic period as
“The Great Formation”, with the growth in the number of people starting new businesses an important economic shift. Business-in-a-box (BiaB) platforms like Shopify have capitalized on this trend, making it easier than ever for folks to start, manage, and grow their own businesses. At Footwork, we’ve partnered with several businesses that empower entrepreneurship, such as Table22, a BiaB platform that enables restauranteurs, chefs, farm owners, and food creators to offer memberships to their patrons, and Via, a SaaS company that expands the capabilities of entrepreneurs on Shopify and other eCommerce platforms to mobile. Heard is the latest, empowering therapists to become entrepreneurs by helping them start, manage, and grow their private practice.
Addressing The Mental Health Crisis
A year and a half ago, I wrote about why mental health “feels like a more important problem to work on than ever before.” Unfortunately, this challenge seems to have only exacerbated since, with the prolonged pandemic leading to a rise in anxiety and depression in adolescents, for example, that was already underway before spring 2020.
For those suffering with their mental health, one of the most important interventions is therapy. There are many well-funded startups building marketplaces that democratize access to therapy. Lyra, Ginger, Modern Health, and Spring Health have targeted employers to offer coaching and therapy to employees, Grow and Headway enable in-network therapy with insurance plans, and many of these and other companies in the space are scaling quickly with strong fundamental businesses. But all of these businesses and their customers rely on one core constituent: the supply of high quality therapists.
Therapists are key to addressing the growing demand for mental healthcare, but becoming a therapist takes a lot of hard work and time. From degrees and training to supervised clinical work and licensing, the process usually takes the better part of a decade. And for those therapists wanting to serve patients outside of hospital systems and treatment centers, such as through the online marketplaces listed above, the best path is to go into private practice. The challenge with that path, however, is that it involves becoming an entrepreneur, requiring a set of skills that most therapists lack education and knowledge in.
Heard’s Series A
That’s where Heard comes in. Its product solves the pain of managing the back office for private practice therapists, by providing entity formation, bookkeeping, payroll, and tax services. Like vertical SaaS companies such as Squire for barbershops and Toast for restaurants, and horizontal SaaS and fintech companies such as Rippling and Pilot, Heard is building the financial operating system and system-of-record focused on independent mental health professionals as its vertical.
Today, we’re announcing Heard’s $10M Series A, led by Footwork alongside co-investors Founders Co-Op, Act One Ventures, and a spectacular group of talented and mission-driven individuals such as Akins Van Horne, Alex Cohen, Ankur Nagpal, Cat Lee, Charles Deutsch, Charley Ma, Cindy Bi, D’Arcy Coolican, Jamie Quint, John Russ, Joshua Ma, Lenny Rachitsky, Mahdi Raza, Manjot Pal, Matthew Goldman, Nikhil Dixit, Nir Dremer, Nitya Subramanian, Shivaas Gulati, Stephanie Palmeri, and Tom Williams. More here in this exclusive piece by Erin Bodwin at Axios.
Beyond Heard’s fit into our thesis areas of empowering entrepreneurship and addressing the mental health crisis, what got us so excited to lead this round? For one thing, the company is growing very quickly in customers and revenue, with hundreds of therapists paying for the platform. The majority of those have learned about Heard through word-of-mouth, and as we talked to customers, we heard effusive love for the service. The opportunity is already big, with nearly a million mental health professionals in the U.S., and expanding quickly, with more choosing to go into private practice, and many more needed to meet the demand for mental health in the decade ahead. As Heard expands its own offering, there’s plenty of room to build a business doing several hundreds of millions in annual recurring revenue.
But as we thought through our investment decision, we kept coming back to our belief in Heard’s founders, Andrew Riesen and Victoria Li. Andrew’s experience as an accountant, as the founder of a tax software company, and through his own mental health journey, combined with Victoria’s engineering and product background, including time at a mental health startup, leads to unique founder-product-market fit. They’ve shown their grit to iterate to product-market fit, and they’ve surrounded themselves with 20 other mission-driven team members working to improve the lives of therapists and their patients. You can read their blog post about this round here. We couldn’t be more excited to work with them. Heard is hiring across the board, from engineering and product to customer success and marketing — come join us!
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Heard is an awesome service. Congrats Footwork and co-investors.