Seemingly every day there is another new company announcing that it is going public. Talkspace, an online and mobile therapy company, has announced that it will have its initial public offering (IPO) in the near future. A busy year for scheduled IPOs including Nextdoor and Hims, amongst others, there are a few key points that everyone should know regarding Talkspace, its fundraising, and what this means for investors moving forward.
TL;DR
- Talkspace is one of the largest providers of online and mobile therapy in the world
- Talkspace has agreed to go public with the help of Hudson Executive Investment Corp, a special purpose acquisition company (SPAC) backed by Doug Bernstein
- Talkspaces website and mobile app links patients, customers, and clients with licensed therapists, allowing people to access the therapy they need via text, phone calls, and video chats
- Talkspace is going to be traded on the NASDAQ stock exchange under the ticker symbol, TALK
- Talkspace has been promoted by celebrities such as singer Demi Lovato and swimmer Michael Phelps
You can learn more about IPOs here.
A Brief History of Talkspace
Talkspace is based out of New York specializing in mobile and online therapy. It was founded in 2012 by Oren Frank and Roni Frank. Its headquarters remain in New York City, NY; however, it now serves a global audience, providing countless people with access to online therapy and unlimited messaging services. Oren Frank serves as the CEO with Dr. Irving D. Yalom serving as one of the key advisers. Neil Leibowitz, MD, JD, serves as the Chief Medical Officer (CMO) of Talkspace.
Oren and Roni Frank decided to found the company after couples therapy saved their marriage. As a result of the therapy they received, they decided that they wanted to share it with the world. Initially, Talkspace was founded as a place where people could go for group therapy; however, Talkspace grew to employ licensed therapists who provided its users with professional psychotherapy.
In 2014, Talkspace introduced Unlimited Messaging Therapy. Now, userss are able to speak with a therapist using text messages either through the Talkspace mobile app or directly on their website. It is also possible for clients and therapists to exchange audio and video messages with one another.
In 2015, Talkspace expanded to include couples therapy, further broadening its services. During the past few years, Talkspace has seen its requests for appointments grow significantly, helping the company improve its fundraising capabilities as it progressed toward an IPO. Political uncertainty and the development of the COVID-19 pandemic have been widely attributed to the growth of Talkspaces appointment requests. Talkspace has also been added as a telehealth offering among healthcare and health insurance providers, including Cigna.
Talkspace Fundraising Ahead of Its IPO
Talkspace has been gone through multiple rounds of funding. In May of 2015, Talkspace raised $9.5 million from SoftBank and Spark Capital. In June of 2016, Talkspace raised $15 million from Norwest Venture Partners.
In September of 2017, Talkspace conducted its Series C funding, raising $31 million with Qumra Capital. Talkspace completed Series D funding in August of 2019, raising $50 million with Optum.
Overall, the company has not had a hard time raising money. This is largely due to the massive increase in demand for its services during the past few years. As Talkspace has worked to expand its mobile and online therapy offerings, the demand for appointments has only grown. As a result, investors have been quick to work with Talkspace, providing them with funding to increase their products and services in an effort to meet the growing demand of its user base.
Talkspace Path to its IPO
In early January of 2021, Talkspace agreed to go public through a merger with Hudson Executive Investment Corp. Backed by Doug Bernstein, the deal is valued at more than $1.4 billion, including debt. The deal also includes $300 million through private investment firms, including Woodline Partners, Federated Hermes Kaufmann Funds, and Jennison Associates.
Hudson Executive Investment Corp is a special purpose acquisition company (SPAC) that raised $360 million through an IPO last year. After Hudson Executive Investment Corp. went public, it had two years to finalize an acquisition, which is where Talkspace comes into the picture.
By raising equity through an IPO, Hudson Executive Investment Corp. is able to merge with Talkspace, which was privately held but is going to go public as a result of the merger. This is a popular alternative to traditional IPOs for companies that are looking for ways to go public. In this manner, SPACs are shell companies.
Talkspace is going to be traded on the NASDAQ stock exchange and will be traded under its new ticker symbol, TALK. In addition, JP Morgan Securities served as the lead financial advisor to Talkspace during its IPO.
Up Next for the Talkspace IPO
Even though the deal is still in the process of being finalized, Talkspace is expected to start trading publicly on the NASDAQ stock exchange toward the end of the first quarter or the start of the second quarter of 2021.
The company raised a significant amount of money through its SPAC during its final funding rounds. Therefore, investors are expected to be eager to purchase shares of Talkspace once it starts trading publicly.
What Should Investors Know?
Talkspace has become one of the most popular ways for people of all backgrounds to access the therapy they need. The service has been promoted by celebrities such as singer Demi Lovato and swimmer Michael Phelps. The future of bright for Talkspace because there is still a severe lack of mental health providers in the United States. It is not unusual for people to have to wait months to see a licensed therapist, psychiatrist, and psychologist. Furthermore, those who live in rural parts of the country may have to drive hours to meet with one. This has led to a growing demand for services such as Talkspace.
The Bottom Line on Talkspace
Talkspace is effecting a paradigm shift in the industry. They have done an exceptional job raising awareness and capital, providing them with ample resources to meet the growing demand for their services. As Talkspace continues to expand its services, its demand should only continue to rise. Therefore, everyone should expect Talkspace to grow once it is traded publicly.