Behavioral health challenges have been intensifying across the United States for years, and the COVID-19 pandemic has only amplified the need for timely and effective mental health services. One company stepping up to meet this growing demand is Connections Health Solutions, a provider of behavioral health urgent care services. Recently, the Phoenix-based company raised a significant $28 million in Series B funding, led by Town Hall Ventures, to support its ambitious expansion plans.
With this new capital, Connections Health Solutions is positioning itself to widen its impact, providing critical, non-acute behavioral health services for individuals in crisis. The funding will help the company expand its footprint, enhance its technology, develop new services, and continue to grow its value-based care delivery model. This expansion is set to cover more states, including Arizona, Montana, and Virginia, and will create hundreds of new jobs, further solidifying the company’s mission to bridge the gap in urgent behavioral health care.
Filling the Urgent Behavioral Health Gap
For individuals in a behavioral health crisis, the options for care are often inadequate. Waiting weeks for outpatient services or turning to the emergency room—where the focus is not on mental health care—are the most common choices. Connections Health Solutions aims to address this gap with its urgent care model designed to provide immediate, non-acute behavioral health services.
CEO Colin LeClair emphasizes that the company’s mission is to provide a solution to the “radically” growing demand for behavioral health services, particularly in crisis situations. He explains, “If you’re a patient who’s in crisis, your options are to wait eight to 10 weeks for outpatient care or eventually go to the emergency room, which is not a great destination.”
By offering crisis stabilization services and 23-hour observation units, Connections Health Solutions is filling a vital role in the healthcare system—offering alternatives to overcrowded emergency rooms and long waits for outpatient services. The new funding will allow the company to continue building out this essential service offering, ensuring that more individuals in crisis have access to the care they need, when they need it.
Town Hall Ventures and Heritage Group Lead the Charge
Town Hall Ventures, a venture capital firm with a history of investing in healthcare companies that focus on vulnerable populations, led the Series B round. The firm’s expertise in investing in value-based care models aligns perfectly with the mission of Connections Health Solutions, which has long focused on providing cost-effective, high-quality care to underserved individuals.
David Whelan, co-founder and general partner at Town Hall Ventures, stated, “Care for individuals experiencing a behavioral health crisis is a massive gap in our healthcare system. We’ve heard from a number of leaders across health plans and state and federal governments that closing this gap is a near-term priority.”
In addition to Town Hall Ventures, The Heritage Group, a venture capital firm that participated in the company’s previous $30 million Series A funding round in August 2021, also contributed to the Series B investment. Together, these investors will help Connections Health Solutions scale its operations and continue to improve the behavioral health landscape.
Expansion Plans and New Services
The new funding will allow Connections Health Solutions to expand its service offerings and geographic reach. The company is already providing services in Arizona, Montana, and Virginia, but it is in active discussions with five other states to establish new partnerships. The company recently won a state RFP process (Request for Proposal) and expects to win another, signaling strong momentum in expanding its operations.
As part of its growth strategy, Connections Health Solutions plans to hire an additional 450 employees, building on its current workforce of around 650. These new hires will support the expansion of the company’s crisis stabilization units, outpatient mental health services, and the Transitions program—a key component of the company’s discharge planning services designed to help patients successfully transition back into the community after crisis care.
Additionally, the company plans to leverage technology to improve patient care and streamline operations. Investing in new technology will enable Connections Health Solutions to better track patient outcomes, improve communication between healthcare providers, and create a more efficient care delivery model.
Partnerships with States, Payers, and Nonprofits
Connections Health Solutions partners with state and local governments, as well as regional nonprofits and other community organizations, to expand access to non-acute behavioral health care. These partnerships are critical in ensuring that the company can provide services to individuals regardless of their insurance status, including the uninsured and underinsured populations.
One of the key factors that enables Connections Health Solutions to operate effectively in Arizona is the state’s unique approach to behavioral health funding. Arizona has three regional behavioral health authorities (RBHAs) that control the distribution of state and federal funds related to behavioral health. This model allows companies like Connections Health Solutions and MIND 24-7 to receive funding for crisis services from these authorities, regardless of a patient’s insurance status.
For many states, though, the regulatory infrastructure to support urgent care and non-hospital stabilization units is lacking. As a result, companies like Connections Health Solutions often find themselves lobbying regulators and lawmakers to create space for this kind of service. While the investment environment has been challenging recently, Connections Health Solutions has found success through its deep relationships with government agencies and health plans that recognize the need for crisis care services.
The Behavioral Health Crisis and the COVID-19 Impact
The need for behavioral health services has grown significantly in recent years, a trend that has only been exacerbated by the COVID-19 pandemic. The crisis in mental health care is particularly acute for children, with one study showing a doubling of mental health visits to emergency departments from 2011 to 2020.
As the healthcare system continues to struggle with these increasing needs, Connections Health Solutions has made a strategic choice to focus on a value-based care model. This approach aligns well with the needs of the Medicaid population and other vulnerable communities who often struggle to access quality mental health care.
The company’s commitment to value-based care means it is focused on improving outcomes and reducing unnecessary hospitalizations, providing more efficient care while simultaneously reducing overall healthcare costs. This aligns with growing trends in healthcare, where there is a strong push for payment models that incentivize positive outcomes over volume of services provided.
Navigating a Challenging Investment Climate
Despite the growing need for behavioral health services, the investment climate in the healthcare startup space has been difficult. According to Rock Health, funding for digital health startups in Q3 2023 was at its lowest point since 2019, reflecting a broader downturn in healthcare investment. However, mental health remains a top priority, and Connections Health Solutions stands out in the field due to its 15 years of experience and 800,000 patient engagements.
CEO Colin LeClair attributes the company’s success in securing funding to its proven track record. He explains, “The challenge for many companies is that they’re raising the sizzle, not the steak. They’re raising on the idea and the opportunity rather than actually delivering results. We’ve got great data demonstrating the outcomes. And I think that was really what allowed the process for us to go smoother than it has for others.”
Looking Ahead
With its new $28 million Series B funding, Connections Health Solutions is primed for expansion, with new services, additional partnerships, and an expanded workforce on the horizon. As behavioral health needs continue to escalate, the company’s commitment to providing urgent, non-acute care positions it as a key player in the effort to close the gap in crisis behavioral health services.
Through strategic partnerships, innovative service models, and a value-based care approach, Connections Health Solutions is helping to shape the future of behavioral health care in the U.S., ensuring that more individuals in crisis have access to timely, effective care when they need it most.
