It’s been a whirlwind 2021 for BetterUp.
The mental health and employee coaching startup finally became a unicorn in late February, some eight years after its founding. Roughly a month later, it hired Prince Harry, the Duke of Sussex, as its chief impact officer. Then, in September, the company made its first two acquisitions, snapping up an Amsterdam-based employee performance software business, Impraise, and San Francisco–based analytics company Motive Software.
The late bloomer’s momentum is now continuing deeper into the fall. On Friday, the San Francisco–based startup with roughly 500 employees announced that it had raised another $300 million in Series E funding, valuing the business at $4.7 billion—a 2.7-times step up from the company’s last round of funding, in the spring, which valued it at about $1.7 billion. Wellington Management, Iconiq Growth, and Lightspeed Venture Partners led the round and were joined by investors including Salesforce Ventures, Mubadala Investment Co., Sapphire Ventures, Morningside Group, SV Angel, and PLUS Capital.
BetterUp’s growth spurt comes at a time when companies in general are facing serious concerns over burnout and retention as the pandemic continues. LinkedIn, Hootsuite, and Bumble all recently did what seemed like the unthinkable a few years ago: They shut down to give employees an extra week off. A broader movement for companies and managers to discuss mental health has taken off, meanwhile, as the term the “Great Resignation” has made it into the vernacular.
Using a mix of automation and vetted human coaches, BetterUp, whose customers include Snapchat maker Snap and Hilton, seeks to improve employee wellness both from within the workplace and outside it. Its starting quiz, for example, asks how often the user schedules “beneficial physical activities” in a typical week, and whether “employees at every level feel comfortable raising questions and concerns to leadership.”
What makes BetterUp special, said CEO and cofounder Alexi Robichaux, is that it seeks to tie coaching to analytics and outcomes. Employers, for example, are able to gauge over time whether employees are becoming more productive with BetterUp’s help, and see whether there are broader organizational issues that need to be fixed.
“This stuff is famously squishy,” said Robichaux. “When I was going through some of my early young professional hiccups and trials and tribulations, I started going to therapy and coaching. One of my frustrations with it was that I felt better, but it was really hard to know if I was improving and growing in pursuit of my goals.”
The company has now reached “well over” $100 million in annual recurring revenue, said Robichaux, who declined to give a precise figure.
BetterUp’s professional development coaching may include helping sales representatives become more confident in pitching customers; training employees in how to present effectively; or helping chief diversity officers improve their companies’ culture. But BetterUp has also expanded into areas like connecting employees and executives to sleep- and nutrition-specialized coaches, or to coaches who may be able to help talk workers through balancing parenting with their jobs.
While mental health has always been an issue in workplaces, the pandemic put a magnifying glass on the space, exposing how the lack of wellness and work/life balance can impact a company’s bottom line.
“There’s a recognition across the world that it’s vital to invest in people,” said Will Kohler, a partner at Lightspeed and a member of BetterUp’s board. “It has always been in focus, but as people became more remote and lacked personal [interaction] and socialization, it really emphasized the need to invest in people.”
Kohler also noted that BetterUp is acting to some extent like a workplace review. If users are broadly dissatisfied with the culture of a company, for example, they can make that clear through BetterUp, which then can surface such insights as “trending issues” for the higher-ups.
That also means that beyond coaching, BetterUp has a variety of other, bigger human resources applications. “We’re now moving from virtual coaching to a broader platform,” said Kohler.
Having made two acquisitions this year, Robichaux said he is open to making more as part of the company’s growth: “One of the unanticipated impacts we’re seeing for COVID is there’s been an acceleration of consolidation [in this space]. So we’re definitely keeping our eyes open.”
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