Voi is raising through a SAFE with a valuation cap of $30 million and a 15% discount rate. In 2020, the company brought in just over $274,000 in revenue. The revenue-to-valuation multiple for this round is quite steep as a result. However, it is curious that the cap is only $30 million after $14.7 million in funds have already been raised. Furthermore, a $30 million valuation is reasonable when compared to other growth stage startups currently raising capital online. Voi’s stage of development and financial backing makes this valuation a reasonable one, and the discount results in somewhat more favorable terms.

The global market for mental health apps was valued at only $587.9 million in 2018. However, it is growing yearly by 23.7% and is expected to reach $3.9 billion by 2027. North America holds the majority share in the market at present, though Southeast Asia is expected to grow at the highest rate during this period. The market’s small size at present is reflective of how new it is. The global anti-suicide drugs market, for instance, was valued at $3.8 billion in 2018. There is a need for app-based mental health support, hence the massive growth predicted in the coming years. Voi is targeting an emerging market, granting it the opportunity to become a major name in the space.

Voi’s team score is its weakest metric, as momentum among leadership appears stalled and some questions remain unanswered. Voi’s apparent founder is McKay Thomas, current CEO of Walrus Health. Thomas entered the startup game as part of PoolTables.com in 2004 and stayed with the outlet during a brief stint at Brigham Young. PoolTables.com was the first of several startups Thomas co-founded. Shortly after, he created baby.com, an online baby clothing retailer that received $40 million in venture funding and serviced Brazil. Thomas then co-founded and served as CEO of First Opinion, an app designed to connect patients to doctors within 30 seconds on a confidential level. It may have served as a trial run for Voi, as there he faced many of the same regulatory and compliance hurdles. Thomas’s current startup, Walrus Health, delivers health management services to patients taking prescription medication. While Thomas has been playing the startup game for years, his ideas have yet to really take off, and his commitment to Voi is now limited to status as the chairman of the board.

Voi’s current leadership is in the hands of Rick Johnson. Johnson holds a J.D. from Vermont Law School and an M.A. in National Security and Strategic Studies from the Naval War College. He started out working for the state of Vermont as a drug task force prosecutor and assistant attorney general. Johnson then moved into military service with the Marine Corps, which gave him first-hand exposure to veteran populations that are highly vulnerable to suicide. He worked as an analyst for National Defense University and in command and chief of staff roles for the US Marine Corps, earning service medals. Later, Johnson spent some time as associate director with the Dartmouth Institute for Health Policy and Clinical Practice. However, he retained his military role as an assistant to the Department of Defense inspector general of Southwest Asia. His primary relevant experience prior to his role at Voi came as director of operations for Incente, a technology platform. The platform was designed to leverage patients’ support networks to improve health outcomes and reduce expenses — a similar premise to Voi’s. He started with Voi immediately upon leaving Incente. Johnson’s extensive experience in the military has no doubt enabled Voi’s rapid acquisition of military contracts, though his overall experience in healthcare is limited.

Bill Hudenko serves as Voi’s chief science officer and Jim Bullion as COO and CFO. Hudenko worked with Johnson as CEO of Incente and is an expert in suicide prevention, providing the medical expertise to build the Voi platforms. He holds a Ph.D. in clinical psychology from Vanderbilt University and conducted postdoctoral research at Dartmouth College. Hudenko has worked as a licensed clinical psychologist for nearly a decade. However, like Thomas, his involvement with Voi is currently limited as he also works as head of mental health at K Health. Jim Bullion holds an MBA in general management from the Tuck School of Business at Dartmouth. He has also served in military roles and is a retired colonel with the US Army. While he serves in an advisory role at Voi, he also acts as president for Phoenix Global Services and the principal for Focus Acquisition Partners. 

The team does have an abundance of relative experience. However, a striking lack of commitment to Voi and a scarcity of strong founder involvement results in a poor team rating. Voi intends to use some of the funds from this raise to hire critical and committed team members, which could mitigate some of these concerns in the future.

Voi’s approach to mental health management through algorithms and networks isn’t entirely unique. There are existing apps — such as Bearable — that enable users to track and manage their mental health outcomes. The Columbia-Suicide Severity Rating Scale also functions as a tool to gauge suicide risk and is widely available for clinical use. However, Voi is unique in combining its Reach service with the Detect service, differentiating through the comprehensiveness of the platform and not stopping at detection. Once Detect identifies high risk individuals, Reach facilities coaching and monitoring. 

Strict compliance requirements make this industry challenging to break into, which helps guard against competitors. However, Voi holds no patents for either application, and its offerings are a bit pricey compared to competitors. The Reach application charges licensing fees of $299 per coach per month and $8 per user per month. This higher price could limit its usage among some vulnerable populations. Additionally, the app does not provide coaches itself, only certifying them and connecting them to users.

Voi has created a suicide prevention solution that does stand out from the competition. However, it’s unclear if the company will be able to maintain its competitive moat.

It’s ideal for a startup to secure a foothold in a target space, and Voi has done that with early contracts with military entities. In the past year, the company commenced a $500,000 contract with the Air Force and demonstrated functionality with the Department of Veterans Affairs. In addition, it is conducting pilot programs with various corrections departments around the country, as prison populations are another at-risk group.

Voi is also breaking into the global market through a partnership with Japanese telecommunications company NTT West to develop a Japanese version of Reach. Japan’s suicide rate nearly matches the US, so it makes sense to expand into Japan early on. 

The startup has begun to take in significant and growing revenue, which is a good sign. In addition, it has cut down its burn rate after massive expenses in previous years. Finally, prior fundraising efforts have resulted in $14.7 million in previous investments. The team has yet to achieve profitability, but with revenue more than doubling over the past two fiscal years, profitability might be within reach.

While Voi is hard at work building up its platform and expanding its user base, this development has come with significant costs. At present, the company holds more than $300,000 in short-term debt and nearly $1.27 million in long-term debt. Likely related is the startup’s striking absence of committed team members, who might have decreased engagement with Voi to lighten the financial burden. With the high debt and lack of a committed founder, both the financials and team risk scores are elevated.

As with any medical services provider, Voi faces massive regulatory hurdles, especially surrounding HIPAA-compliance and data privacy concerns. In addition, given its mission, Voi runs the risk of potential liability should a user’s condition worsen. These considerations resulted in a slightly elevated legal risk.  Finally, raising on a SAFE contributed to a slightly higher than average investment terms risk as SAFEs are less favorable to investors than common or preferred equity.

Given Voi’s massive levels of fundraising and several years of application development, it’s reasonable to expect higher revenue at this stage. Its lack of revenue is likely due to the challenge of penetrating the healthcare space, a difficulty likely to continue. In the meantime, investors are facing a questionable valuation and enormous liabilities. The leadership team also presents striking levels of disengagement with Voi and commitment to other ventures. Given financial woes, less-than-favorable terms, and a team currently unengaged with the company, Voi’s future success remains uncertain.

Voi has made meaningful inroads when it comes to partnerships and funding. Its suicide-prevention product is differentiated and has begun demonstrating success through early contracts and pilot programs. That kind of early connection tends to lead to larger contracts down the line. Thus far, Voi has struggled to thoroughly penetrate a highly regulated space. However, after years of development and investment, Voi could reach commercial scaling in a relatively short time. If it can do so, investors would be ideally positioned to recoup their investments, with financial concerns fading into the past.

Voi is developing an app-based system to detect and prevent suicide in high-risk populations. It employs two offerings: Voi Detect to identify at-risk individuals and Voi Reach to manage suicide risk after identification. It has begun taking in revenue, secured contracts with military and corrections clients, and is in talks with a foreign partnership.

The company is somewhat overvalued and holds significant liabilities. In addition, the team is strikingly unengaged with the company, and the company hasn’t generated as much traction as might be expected after receiving $14 million in past fundraising. However, Voi has been hard at work at breaking into a difficult market and could see its early efforts pay off in the near future. Its products are highly differentiated, and suicide prevention is a desperate need in US and global markets. For these reasons, Voi has been rated a Neutral Deal.

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Analysis written by Benjamin Potts.