Case Study
AbleTo
Designed a revolutionary population and tele-behavioral health solution.
Sector
- Healthcare
Status
Acquired by Optum
The Opportunity
When we first met the AbleTo team in 2013 and they shared their plan to integrate the treatment of mental health with physical health, we immediately understood the potential.
Having invested in Health Dialog eight years earlier, we’d seen first-hand that it was possible to improve general health outcomes and significantly reduce expenses by addressing a population’s mental health care needs.
In order to pull this off, we also understood that AbleTo had to be a pioneer in several critical areas. They needed to “meet patients where they are” by leveraging pre-Covid/pre-Zoom internet video technology to deliver HIPAA-compliant, evidence-based telebehavioral virtual care at scale. They needed to manage a high-quality remote clinical network across all 50 states. And they needed to convince health insurers to evaluate the success of their behavioral health intervention by measuring the medical spend reduction they achieved (i.e., spend $1 on mental health to achieve $5 of reduced medical spend). Understanding the nuances of these challenges and the available approaches to finding a solution required contextual understanding and a specialized network – both of which .406 brought to AbleTo.
The .406 / AbleTo
Partnership
As AbleTo’s first and largest venture investor, .406 partnered with the founding team and played an active role in AbleTo’s success. In addition to leading the Series A financing and sitting on AbleTo’s board, .406’s key contributions included:
- Introducing and recruiting most key executives including:
- CEO (from .406 Fund I company)
- Chief Medical Officer (.406 EIR)
- CFO (CFO for several .406 companies)
- Chief Operating Officer (.406 network and .406 LP)
- Chief of Staff (.406 network)
- Chief People Officer (.406 network)
- Helping AbleTo architect its technology strategy and recruit its development team
- Introducing two of AbleTo’s three independent board members
- Leading investment negotiations with Aetna and Horizon Blue Cross – key early AbleTo customers and strategic investors
- Leading negotiations for commercial and strategic investment from Optum, which ultimately acquired AbleTo
- Chairing the AbleTo board’s Transaction Committee, which supported CEO in exit negotiations with Optum
The Outcome
In March 2020, AbleTo was acquired by Optum for an all cash deal that stands out as one of the most successful fully-realized exits of that cycle.
In the period from .406’s initial investment in AbleTo to the company’s sale to Optum, AbleTo’s revenue grew by more than 50x, and its valuation grew by over 100x. Most importantly, AbleTo’s care model has become the standard of care for tens of millions of Americans––saving lives, improving outcomes, and reducing costs. In addition, several of AbleTo’s early team members are now in senior leadership roles across the digital behavioral health industry––many in the .406 portfolio.
Going forward, .406 continues to enjoy a special relationship with the AbleTo team including backing AbleTo’s founder in his next company; placing several ex-AbleTo executives into .406 portfolio companies; and adding former AbleTo CEO, Trip Hofer as CEO of a Fund III portfolio company and Venture Partner at .406.
From the AbleTo Team
It would be a violation of HIPAA rules to give too much detail, but I first met Liam in my capacity as a practicing cardiologist. As AbleTo’s first institutional investor, .406 Ventures was instrumental in helping build our management team by introducing us to a pipeline of talent from within their own network. The .406 team also served as an invaluable guide and mentor, offering advice that only investors that are in for the long run dare give.”