Mindstrong, a California-based Mental Health Start-up, Conducts Layoffs & Closes Office
The Mindstrong layoffs come after a $100 million funding round in 2020. The layoffs include the exit of its CEO and CFO.
Layoffs have begun to hit telehealth companies, leaving employees and patients in the lurch.
Mental health start-up Mindstrong is eliminating positions impacting 128 employees, according to a California WARN notice. The company is also closing the doors to its office in Menlo Park.
The Mindstrong layoffs include the termination of CEO Michelle Wagner, as well its CFO, Chief Technology Officer, and other C-suite executives.
The virtual therapy health platform provides coaching, therapy, and psychiatry services via its mobile app, but will end its patient services on March 10, according to a report by Behavioral Health Business.
The mental health start-up reportedly sent an email to its clients, advising them to find another practitioner before March 10, and said that some of its staff may end their services before the March deadline.
Mindstrong announced a $100 million funding round in 2020 during the height of the pandemic, and was named a finalist in a challenge to reduce Veteran suicide last September. The company was awarded $250,000 in grants to provide assistance in underserved areas.
The Bay Area company was backed by numerous investors, including ARCH Venture Partners, General Catalyst, Foresite Capital, Optum Ventures, and 8VC.
The news of Mindstrong’s layoffs elicited a passionate response from Nick Mercadante, Founder and CEO of PursueCare, who called it a “black eye” for the virtual mental health industry.
Mercadante took to LinkedIn to share an article announcing Mindstrong’s 2020 successful funding. “When I read it, I knew it was destined for a massive wake up call,” he wrote of the start-up’s situation.
“I don’t know their exact circumstances. I’m sorry for their staff who no doubt care about what they were doing. But I do know that burning through that much capital in such a short window is inconceivable to me as a healthcare operator,” he continued.
The Founder and CEO of PursueCare, an addiction treatment and behavioral health service telemedicine platform, pointed out that shutting down such operations impacts patients, and says that over-capitalization in virtual health can be dangerous.
“Healthcare is local, it’s a grind, it’s not sexy, and particularly in behavioral health it’s complex requiring real treatment, even when virtual,” he wrote. “Not coaching, shiny stuff, bots when multidisciplinary and collaborative care is needed.”
Of course, Mindstrong is hardly alone at the moment as layoffs are occurring in the tech and other industries.
Teladoc Health recently announced it would cut 6% of its workforce in an effort to lower operating costs, and Mindpath Health is closing its Ohio offices and conducting layoffs.
Late last fall, Cerebral, a telehealth unicorn, slashed 20% of its staff. Simone Biles quietly cut ties with the telehealth company earlier this year.
As of now, Mindstrong employees and leaders have remained mum on social media, including LinkedIn, in light of the layoff news.
