- Hurdle, a digital health platform offering culturally competent therapists, raised a $5 million seed round in January.
- Hurdle addresses the unmet need of BIPOC mental health patients in a system that’s not designed for everyone.
- Founder Kevin Dedner struggled to find funding, with investors telling him Hurdle’s offerings were too niche to turn a profit.
- Visit the Business section of Insider for more stories.
“There’s a hidden question within a question.”
For nearly three years, Kevin Dedner met with hundreds of potential investors, pitching the idea that a digital mental health platform for Black men was a business worth betting on.
It took him a year, he said, to understand what venture capitalists and other investors were really asking him.
Investors wanted someone fully committed to the idea.
Initially, Dedner, a healthcare consultant with a master’s in public health, treated his fledgling business as one of many clients. Unwilling to give up his day job, he had no past experience in VC pitching. No one, aside from an old Alpha Phi Alpha fraternity brother who’d gone into VC, came out and told him this directly.
“You have a lot of work to do,” Dedner recalls being told.
Through the support of nonprofits, accelerators and a dogged, even stubborn commitment to an idea many investors considered too niche for their digital health portfolios, Dedner did the work. In January, he raised $5 million in a seed round in January for Hurdle, a teletherapy platform targeting the unique mental health needs of Black, Indigenous, and people of color (BIPOC) populations.
Backed by 406 Ventures, Seae Ventures, and F-Prime Capital, the Washington, D.C.-based company has beaten the odds. In the past, Hurdle, formerly known as Henry Health, has been included in accelerators and incubators like StartUp Health and the Morgan Stanley Multicultural Innovation Lab.
According to Crunchbase’s 2020 diversity report, less than 2.4% of VC funding has gone to Black and Latinx founders. Of that, less than 1% has gone to Black founders since the website’s data dating back to 2015.
Now part of what Dedner calls a “super elite club,” Hurdle’s founder is brutally honest about the difficulties facing BIPOC founders, particularly if one is pitching a business idea that directly addresses systemic racism in healthcare.
Currently, Hurdle sells directly to consumers, offering virtual visits with specially trained therapists able to handle the mental health needs of Black men and taking patients’ employer-backed insurance plans. Although Dedner acknowledged in a recent Medium post it must expand and change its offering to become profitable, he told Insider he believes narrowing his focus to a niche population will give Hurdle the ability to reach other diverse populations in the future.
At the moment, Hurdle operates in the D.C., Maryland, and Virginia area and has plans to expand its offerings to insurance companies and employers, tailoring its sales model on a case-by-case basis, Dedner told Insider. In the near term, it will add meditations and daily motivational messages for existing users.
Hurdle addresses the lack of cultural competency in the mental health system
The idea for Hurdle was borne out of Dedner’s own struggles in finding a therapist he was able to connect to and build a working clinician-patient relationship with. The one he stuck with had something different than the others: a level of cultural humility and an ability to ask questions that made Dedner feel heard.
Dedner had already been a longtime public health consultant working on a range of topics, from childhood obesity to STD prevention. The core of Hurdle comes from an understanding that people of color, and Black people in particular, have a larger overall health burden due to oppression and systemic racism. The mental healthcare system frankly isn’t designed for everyone.
“We are much more blunt in this assessment than we have been” after the racial reckoning following the death of George Floyd last spring, Dedner said. “What we haven’t been honest about is that the system is designed for patients from middle-class white families.”
Since then, Dedner said that the realization about the need to address systemic racism has opened up a nationwide dialogue. Black Americans have begun seeking out mental health treatment in greater numbers. Until last spring, there was no widespread willingness to acknowledge the different experiences of BIPOC in this country, he said.
Since then, people have become much more honest about the experiences of Black people and other people of color.
“I was raising this alarm much earlier,” Dedner said. Even the best therapists have little formal training in cultural competence, he added.
Having built a network of therapists trained in cultural competence, Hurdle offers clients a platform of mental health professionals it can vouch for.
Traditional VC is ‘inherently unfair’ to BIPOC founders from disadvantaged backgrounds
Dedner said he talked to over 280 prospective investors — including insurance companies, angel investors, and VCs — before he found people who were really willing to listen to what he had to say.
“What investors will look for is someone who is willing to adjust their ideas,” Dedner said. “I was quite frankly very stubborn about my ideas.”
Some investors suggested Hurdle expand its digital health offerings from Black men to all men. With a public health background, Dedner refused to divert Hurdle’s key mission of treating BIPOC, citing the fact that Black men have the lowest life expectancy among all males.
Dedner is frank about the challenges from trying to make VCs see the value in keeping Hurdle’s offering more specialized to the BIPOC patient population.
“I beg to differ that our company can’t grow 10x,” he said, referring to the scaling demands venture capitalists make of startup companies. “Quite candidly, that’s just from people’s biases.”
Considering the disparities in mental health access and outcomes, there’s a sizable untapped market for providing BIPOC with therapy options that fit their backgrounds, he said.
It’s more difficult for people who come from different backgrounds to get their startups off the ground, he said, citing the fact that primarily white founders are capable of raising money from family and friends due to their wealthier informal networks.
“The way that traditional VC makes investment decisions is inherently unfair to people from disadvantaged backgrounds,” Dedner said.
The clear intergenerational wealth gap in BIPOC communities wasn’t the only challenge. According to the Brookings Institute, the net worth of a white family in 2016 was $171,000, almost 10 times greater than that of a Black family ($17,150). In the first year of Hurdle’s existence, Dedner said he spent a lot of time “running in place” until he understood how to escalate conversations with investors to a place where they took Hurdle seriously.
Dedner cites supporters, including the accelerator StartUp Health and the Morgan Stanley Multicultural Innovation Lab, with helping him to position Hurdle as a startup worth investing millions in. In particular, he credits the Transparent Collective, a nonprofit that helps underrepresented founders understand the culture of Silicon Valley and secure funding.
Run by serial entrepreneur James Norman, the Transparent Collective funded a flight to the Bay Area, where they gave Dedner a crash course on Silicon Valley culture.
If Hurdle is successful, it could change Silicon Vallley culture
With his seed round, Dedner intends to hire more key employees and expand into a minimum of other states by the end of the year. In addition, Hurdle has key partnerships lined up with major insurance companies, Dedner said, and plans to build out its therapist networks outside of the D.C. metropolitan area.
Having been repeatedly told Hurdle’s mission to serve BIPOC mental health needs was too niche, Dedner said he acknowledges the tension between the competing aims of public health and venture capital returns. However, he said he believes understanding how to serve a niche population will help Hurdle understand how to reach more diverse populations.
If Hurdle can prove naysayers wrong about BIPOC-geared digital health being a good business, it may just change Silicon Valley culture. He said he doesn’t blame traditional VCs for making decisions based on what they know: their experiences hearing from primarily white and Asian startup founders.
“It’s based on a truth. It’s their truth. It doesn’t mean it’s the only truth. So I think what we have to do is give more narrative to a new truth.”