A St. Petersburg-based healthtech company is one of a small but growing number of women-led firms capturing the attention of venture capital investors.
IMCS Group, which provides behavioral health therapy for people suffering from injuries incurred at work, received an $8 million capital infusion in July from HLM Venture Partners and .406 Ventures, with a follow-on investment last month from the Hartford Investment Management Co. The new investors joined Centripetal Capital Partners, which had invested in IMCS in 2015 and also participated in the latest round.
Both HLM and .406 are very familiar with the healthcare market and are making introductions to talent and vendors that will help IMCS grow, said Lori Daugherty, CEO.
“It’s allowed me to jumpstart the company in many ways because of the expertise they bring to the table,” Daugherty said. “What I love about this industry is that at the same time we are creating shareholder value, we are also helping people. We’re giving them the skills and tools they need to change their lives.”
Retraining the brain
IMCS – or Integrated Medical Case Solutions – will use the funding to expand its behavioral therapy programs, which allow workers to return to work more quickly and have more positive treatment outcomes.
“We work with workers’ compensation insurance carriers, third party administrators and self-funded self-insured employers to treat their injured workers for workplace injuries. We’re treating the injured workers for pain so they don’t become addicted to opioids and are providing them skill sets through cognitive behavioral therapy to use brain power as opposed to prescription medications, ” Daugherty said.
The company also deals with trauma, PTSD and stress-related cases, such as witnessing a bank robbery or seeing a co-worker shot.
Cognitive behavioral therapy retrains the brain into thinking through situations differently.
“A lot of people catastrophize. They think things are worse than they really are. We give them the skills to get through that. An example would be going back to the scene of an accident or a shooting, and having them relive the experience and learning it’s OK, so that person can work through it,” she said.
IMCS just launched a couple of Covid-19 programs, to treat people who have the virus or are dealing with the effects of it.
“If you are a healthcare worker, first responder, grocery store worker or restaurant employee, and you’ve been around Covid you may not have necessarily had Covid but you are stressed over the fact you may get it. Or potentially you are asymptomatic and brought Covid into your home and a loved one has gotten sick or passed away because of you. We provide help for those individuals as they work through their grief,” she said. “For those who have been infected with Covid and have neurological issues as a result of having been in the ICU, who are having breathing issues, we help them manage through the depression or anxiety they have in just breathing or returning back to normal.”
IMC has a network of about 1,500 clinicians, primarily psychologists, and is in all 50 states.
Prior to the Covid pandemic, 90 percent of the treatments were face to face. The company quickly transitioned to telehealth and now provides 98 percent of its treatments through telehealth.
Daugherty is a 30-year veteran of the workers’ compensation industry, primarily in the pharmacy benefits management sector. She has led companies of all sizes and stages including serving as CEO at Care Services, president at PMSI, and CEO at Working Rx, prior to joining IMCS in May 2018.
“Behavioral health is new to me. However, our core client is workers’ compensation and that’s very familiar,” she said. “Because we are a network we are very similar to a PBM. We manage a network. We sit in between the provider and the end user. So from that aspect it’s a very familiar business to me.”
The capital raise didn’t come easy. Daugherty joined IMCS in May 2018, when the company was headquartered in West Palm Beach. She did an overall analysis of the kind of structure the company needed from a technology and staffing point of view and assessed market needs. Then, based on that assessment, she determined how much capital IMCS needed to raise.
The capital raise began in mid-year 2019. In December, IMCS moved its headquarters to St. Petersburg, where Daugherty has lived off and on since 1983. Then Covid-19 hit in March.
“We were close to a closing in March. Then one of the investors who had clubbed up with HLM got cold feet because of Covid and stopped all investments. That left us back at square one. HLM really believed in what we do and why we do it and the market. They were able to find another investor to club up with them to get the deal done, so we went through due diligence again. We finally closed the transaction in July with .406 and HLM,” Daugherty said.
Fewer than one in five startups in Florida that received early-stage funding in 2019 were women-led companies, and less than $8 out of every $100 invested in a Florida startup went to a startup led by a woman, according to Embarc Collective’s Glaring Gap study.
Several prospective backers told Daugherty IMCS was too much of an early-stage company to invest in, and told her to call back when the company hit financial benchmarks.
“We are early, early stage, and I’m still in the process of putting our team together, but I have an amazing team. When HLM and .406 invested they were betting on us as a team to be able to do it,” Daugherty said. “They believe in us. They believe in the opportunity.”
IMCS has 52 employees, with about half based in the Tampa-St. Petersburg area and the others in eight states. The entire staff is working remotely because of the pandemic. The company’s finance division remained in West Palm Beach.
IMCS doesn’t disclose its revenue, but Daugherty said she expects it to double in 2021. She also expect to hire another 15 to 20 staff members.
“The workforce in the Tampa Bay area is amazing. There are so many call centers and healthcare companies, particularly in the workers’ compensation space, so the talent pool we have to draw from is amazing. There’s a lot of management skill set available to us as well, senior leadership and middle-management,” Daugherty said.
There are a lot of technology companies to draw talent from as well, she said.
IMCS could add more programs in the coming year. The company is looking at neurological programs to treat concussions incurred at work or even while playing professional sports, and other alternative methods beyond cognitive behavioral therapy for treatment modalities.
“We’re also continuing to invest in technology to give self-service capabilities to individuals. Maybe you don’t need a psychologist, maybe you just need a licensed clinical social worker who can chat with you via text. Maybe’s a lower level of service you need, and we’ll continue to look at that as well,” she said. “Today we’re primarily treating those chronic cases, but there are acute cases out there that we can certainly help injured workers with.”