Daybreak’s Series B

Over the last several years, USV has built out both our thesis and portfolio around tackling the mental health crisis. Our investments have broadly broken down into three groups:

  1. Broadening access to care by making it easier to find, receive, and pay for. Businesses like Brave Health are completely changing the ability for patients to access care, often for those who need it most. Patients can receive high quality outcome-driven care where they are, when they need it, and have it seamlessly covered by insurance including Medicaid.
  2. Expanding options for types of care. As new modalities like psychedelics become validated and important options for care, we are looking to platforms like Journey Clinical that allow therapists to learn about and adopt new modalities with their patients.
  3. Supporting mental health that doesn’t look like mental health. Increasingly, as with all of healthcare, we know mental health needs to be treated proactively and not just reactively. We’ve been thinking about new platforms and products that can promote and foster mental wellbeing through connection, fun, engagement, or community, and often at a much lower price point than traditional care. Platforms like Mindset create scalable and fun ways to build this behavior into daily routine. 

As our understanding about the state of mental health has deepend, we’ve continually returned to the outsized impact on children and the critical moment we are in for adolescent care. The perfect storm of COVID-19 isolation, global instability, the looming climate crisis, and economic rockiness has made the statistics skyrocket. 16% of kids in the US had at least 1 major depressive episode in the last year. 60% of kids who report having major depression do not receive treatment.  

We believe that the mental health crisis for kids is at a precipice moment. Care is quickly becoming an essential, expected, and, hopefully soon, required need for kids–first for those currently struggling and then, eventually, for all children. In this, schools are poised to play a unique role in helping students and working toward solving the crisis of adolescent mental health. They are often best positioned to identify students who need help and are incentivized in wanting them to succeed. Schools and educators know that mental health is critical for both attendance and performance. But the practitioner shortages have made in-school treatment always challenging and often impossible. On average, there is 1 psychologist for every 1,200 students in a school. Treatment is hard to find. 

USV has built a significant and exciting portfolio of education-related investments effectively without investing in businesses that sell into schools. However, as we dug into adolescent mental health, the urgency in confronting the crisis, and both the people and budget best situated to help solve it, we discovered that this market was unique in the role schools and districts are playing. Administrators repeatedly articulated putting resources to students’ mental health as a top 2 concern (either right before or after the intense teacher shortage they are currently facing.) And so we came to believe this is a market where this channel must play a primary distribution role and is advantaged in doing so as an efficient business model. 

That belief brought us to Daybreak. Alex and his team have built what is quickly becoming the leading pediatric mental health platform, working with the existing infrastructure in schools and districts to help the students that need it most at the right moment. Right now, that means students who are currently suffering from mental health issues. Soon, that will also mean scalable products that can help all students proactively. The Daybreak product isn’t just a stop gap–the course of care creates meaningful outcomes, personalized treatment plans, and is easily managed by the students, schools, and parents to work together. The outcome-driven approach has attracted health insurers to work with the platform, too, maximizing access and allowing extension of care. Daybreak works with both Commercial and Medicaid plans and already has more than 9M lives covered. The team has also realized that who is supplying the care–the quality, diversity, accessibility, and reliability of the providers–is of paramount importance for efficacy and has developed unique supply channels at a critical moment in a supply constrained market. 

Daybreak already works with more than 60 U.S. school districts including many of the biggest in California, Oregon and Texas, and others across the country that will be activated in time for the new school year. We are excited to partner with Alex and the Daybreak team in their Series B as they continue to become the go-to trusted brand and partner to districts in providing this care and support.