Chris Molaro, served in the Army for five years including a tour in Iraq as a platoon leader. Coming back home, he experienced firsthand the gaps in the behavioral health system and how veterans and civilians alike face too many barriers to receiving appropriate, timely care.
When he came back from Iraq, he, like many soldiers, were screened for health issues, both physical and mental. One soldier from his unit found to have depression took his own life.
“Our investigation into the situation showed that he never followed up with the resources that he was referred to that were made available to him and no one ever followed up to say, ‘Hey, you're not tracking, things aren't improving. How can we be of service to you?’” Molaro says “And that really feels like a big leadership failure to me.”
Molaro went on to launch NeuroFlow, which creates platforms that connect the patient care providers and specialists who can remotely coordinate and deliver mental health care at scale. The venture is derived from his personal experience serving in the Army.
While in business school, Molaro met Adam Pardes, who was in a bioengineering Ph.D program. They met a psychiatry professor who talked about the gaps in care, new payment models and value-based care, which was still in its infancy at the time.
“That's when the light bulb went on and said, “I think that there's something here,” Molaro says. “No one is really addressing behavioral health today.”
They saw this as a big, unaddressed issue here, and potentially a big market to tap. In 2016, NeuroFlow was launched.
For the first year and a half in business, the partners were bootstrapping the business, not taking salaries for themselves. They were funding the company purely by winning business-plan competitions, which gave them $140,000. That funded the build of the beta version as well as trips to a few conferences to get feedback and initial customer interest. Then they set out to raise a first investment round, looking for $1 million.
“It was one of the hardest things I've ever had to do,” Molaro says. “The learning curve was so intense and steep. We talked to 140 investors who told us no. And with every no, though, we learned, we improved, we iterated.”
Some of those investors came back, drawn by the progress they made. Soon, they had over-subscribed a round that brought them $1.25 million and some really great partners and investors, as well as some doctors who partnered with them.
In January 2021, Molaro and Pardes closed a $20 million Series B round led by Magellan Health.
Molaro spoke on the Smart Business Dealmakers Podcast and shared his thoughts on changing the way mental health care is delivered, his most recent M&A deal, and the company’s future. Press play to hear the full interview.