During his first year in residency at Mass General, Dr. Harry Ritter realized he could make an impact on healthcare without necessarily practicing medicine. After a consulting stint and some formative years leading delivery system innovation at Oscar Health, he founded Alma, a company that strives to make mental healthcare simple and affordable to all. Not only does it connect patients to in-network therapists, it also arms those providers with much better tools to run their practices. With a quick pivot to virtual care support at the beginning of the pandemic, the company raised a $28 million Series B round in February and just announced a $50 million Series C round led by Insight Partners. Optum Ventures, Tusk Venture Partners, Primary Venture Partners, Sound Ventures, BoxGroup, and Rainfall Ventures also participated in the round.
In this Q&A, Harry discusses his three big insights for startups, his philosophy for hiring, and the shifts he foresees in the mental healthcare space.
See a deeper dive on our new digital publication, First Edition.
Given the often long sales cycles of enterprise healthcare, how did you position Alma in the early days? What was important for early enterprise healthcare investors to see?
The first big piece of the equation, in my view, is demonstrating opportunity size. Mental health is a massive market touching over $221 billion annually. And the tailwinds, even before COVID, were obvious and dramatic.
Second, particularly early in a company’s life, I think investors need to build conviction that the entrepreneur is the right person to build the solution in this space and has the ability to recruit, motivate, and lead the best possible team. Coming to Alma as a doctor who had grown up at Oscar and been part of that business’s growth experience helped me make that case for Alma.
Finally, the company’s business model matters. With Alma, I set out to create a fundamentally new way for providers to come together and practice in a new model that could support clear and obvious needs for payers and other key industry stakeholders like employers.
Taking raising capital out of the equation, what’s a piece of advice you’d want to give to new healthcare founders on day one?
In healthcare, we’re very fortunate to be building businesses that are inherently mission-driven. Don’t take that for granted. It is a real privilege to build a business that can impact the health and wellbeing of our fellow humans. And this inspiration that you as a founder and your teams can draw from that work can foster a level of innovation, creative thinking, and passion that is really special.
Unlike some other industries, there are so many nuances to the healthcare industry. In the early days, how did you think about building your team? Did you opt to bring on people with more generalist backgrounds or did you bring in specialists? How has that changed as you’ve scaled?
During the early days of Alma, I focused on the immediate needs—recruiting really talented individuals to oversee our key functions—and expanded the team from there. The initial team focused on our mental health provider community, operations, marketing, and engineering. It was really important for me to bring on leaders that would set the standard for our company culture and bring our mission to life. My philosophy has always been to hire people more experienced and talented in their field than I am and then empower them to do their best work. As CEO, my job is to set a vision for the company and give our team the gas they need to grow and scale.
As Alma scaled, what was the key turning point in discovering product-market fit? Any learnings you can share with other entrepreneurs about getting to that key milestone?
We launched our membership offering to therapists in October 2018. That first year, we focused on delivering a really exceptional experience to providers as we helped elevate and simplify the therapy experience. Most therapists operate as isolated small businesses and struggle with the challenges of running an independent practice—from marketing for new clients to basic day-to-day tasks like scheduling and billing. When they came to Alma, we worked really hard to make their life as easy as possible. That focus paid off our first year—we grew organically and didn't invest in paid marketing until a full year after we launched.
When the pandemic hit last year, we were forced to close down our co-practicing spaces and rethink how Alma could best support our providers during this time. A major part of this was ramping up our insurance program and doubling down in our investment to support teletherapy. I’m really proud of the impressive growth we’ve seen over the past year. It’s clear our offering is resonating in the market—we more than doubled the providers on Alma’s platform over the last six months and our membership is growing 30-40% quarter over quarter. We’re also seeing that teletherapy isn’t going away anytime soon. We recently surveyed our members and found that 95% of therapists intend to continue offering teletherapy.
The last year has fundamentally changed the face of healthcare, any predictions on where some of the largest opportunities for change are today? Or put another way, if you were starting a new business today, where would you spend time?
I think we’ll see three major shifts in mental healthcare over the next decade. First, virtual care will remain central to how care is delivered, and technology will evolve around the virtual experience to make it even better. Second, I think we’ll see more digital enablement of care. The experience of getting care in 2021 looks shockingly similar to what it looked like in 1921. and I think that will change as we find new ways to bring data and smarter technology into therapy. Lastly, I think we’ll see an increasing appreciation for preventive mental health—just like we engage in prevention to stave off heart disease or diabetes, I think we’ll see people engaging with mental health services not only to deal with challenges but to build resilience and support for the inevitable difficulties that life brings our way.
And last, but not least, why has NYC been the right place to build Alma?
New York is an incredible place for tech companies. First, the talent is exceptional. New York attracts some of the best and brightest and encourages a vibrant, diverse, and engaged workforce. Second, New York is an awesome market to build products in. The sheer size and breadth of the city and state economy are fertile ground to not only test new ideas but begin to scale them. Lastly, the New York tech ecosystem has really blossomed in recent years, and the institutions (like Primary!) that support the community are incredibly robust and value-adding to founders and innovation in the space.