Information on the Target

evolvedMD, founded in 2017, is a leader in Collaborative Care Management (CoCM), providing integrated behavioral health services within primary care settings. The company employs a unique model that embeds behavioral health providers at more than 200 locations across Arizona, Utah, Florida, New Mexico, and Colorado. These on-site professionals are supported by clinical managers, care coordinators, and psychiatric nurse practitioners, ensuring high-quality mental health services in a convenient and trustworthy environment. evolvedMD has gained significant traction in increasing awareness and adoption of the CoCM model, particularly highlighted by a recent Milliman/Meadows study showcasing high adoption rates in Arizona, their home market.

Industry Overview in the Target’s Specific Country

The behavioral health industry in the United States has faced increasing demand as awareness of mental health issues rises. With mental health challenges affecting millions, there is a pressing need for accessible and effective care solutions. According to analysis by the National Institute of Mental Health, nearly one in five adults in the U.S. live with a mental illness, underscoring the necessity for integrated care models that streamline access to treatment.

With the onset of innovative healthcare models like Collaborative Care, there is a shift towards integrating mental health services into primary care. This integration not only facilitates better patient outcomes but also signifies a change in how healthcare professionals address behavioral health needs. The CoCM model has shown promise in reducing healthcare costs while improving service delivery efficiency.

States like Arizona are leading the charge, implementing policies that encourage the adoption of integrated care practices. The focus on policies that foster mental health access is critical in addressing societal challenges related to behavioral health service gaps. These developments indicate a valuable growth opportunity for companies like evolvedMD, which are well-positioned to cater to the evolving landscape.

Overall, the industry is witnessing substantial investments in integrated behavioral health solutions, indicating a long-term valuation potential. The collaboration between healthcare systems and innovative care delivery models illustrates a commitment to improving mental health resources across the nation.

The Rationale Behind the Deal

The recent $34M Series B investment round, led by Sustainable Investing at Goldman Sachs Alternatives, aims to expand evolvedMD's reach and enhance its operational capabilities. This investment is crucial in supporting evolvedMD’s mission to address the growing behavioral health needs in the United States, particularly as millions face unmet mental health challenges.

With the backing of established investors and additional capital, evolvedMD is strategically positioned to amplify its operations and integrate its services into a wider range of primary care settings, making high-quality behavioral health accessible to more patients nationwide.

Information About the Investor

Goldman Sachs (NYSE: GS) is a leading alternative investment firm with over $500 billion in assets under management and three decades of experience. The Sustainable Investing division focuses on investments driven by societal growth and quality of life improvements. They offer a broad array of alternative investment strategies, including private equity, real estate, and sustainability initiatives aimed at long-term value creation.

The firm's commitment to inclusive growth, particularly in the healthcare sector, resonates with evolvedMD’s goals. By investing in companies that tackle significant public health challenges, Goldman Sachs aims to leverage its resources and expertise to drive innovations that enhance patient care and reduce overall healthcare costs.

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The investment into evolvedMD appears to be a strategically sound decision given the growing recognition of the importance of mental health services in primary care. With an increasing number of patients facing mental health issues, companies that provide integrated care models are likely to experience robust demand. EvolvedMD’s demonstrated success in the field, with over 36,000 patients serviced in 2024, indicates an effective service delivery model that is well-positioned for future growth.

Moreover, the recent study showing a 15% reduction in risk-adjusted costs for patients utilizing evolvedMD's services enhances the company's value proposition. This type of empirical evidence is instrumental in validating the effectiveness of evolvedMD's Collaborative Care Model and its potential market impact.

Furthermore, the partnership with Goldman Sachs Alternatives not only provides essential capital but also access to expertise and networks that can facilitate further expansion. With the firm’s background in sustainable investing, they can further enhance evolvedMD’s growth trajectory through strategic partnerships and support.

In conclusion, this deal could prove to be an exemplary investment opportunity. Given the upward demand for integrated behavioral health services and evolvedMD’s proven success and innovative model, the potential for strong returns on investment is notable. As the need for accessible mental health care continues to rise, evolvedMD is well-positioned to capitalize on this pressing societal issue.

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