Elemy rolled out a fourth round of layoffs on Thursday, effective that day, as part of its evolution into a near pure-play software platform.
The San Francisco-based behavioral health tech startup declined to specify how many roles were impacted. The layoffs are part of its evolution from tech-backed autism service provider to a near-pure play software company, Elemy CEO Yury Yakubchyk told Behavioral Health Business.
This layoff and the other earlier in the year bring the company closer to its founding objective, which is to be a software provider and platform for pediatric behavioral health providers and patients.
“The whole point of our business was to move gradually towards a model where we had a software platform that empowered the clinicians and also families but didn’t have full-time salaried clinicians on our side — we’ve been gradually moving towards that,” Yakubchyk said. “And as more automation gets introduced, we’ve had to part ways with more people.”
Yakubchyk did say that 38 roles of a 40-person patient intake team were eliminated due to efficiencies in its software.
Founded in 2019, Elemy developed tools to help support pediatric behavioral health services including scheduling, patient-provider matching, patient and provider onboarding, quality control, logistics and route management. It also launched its in-home Applied Behavior Analysis (ABA) practice as a testing ground to prove that its software worked and met the needs of the industry. While the software was developed, Yakubchyk said the company needed a large administrative staff to support the ABA practice.
The company has since expanded its virtual care services into other pediatric behavioral health conditions including ADHD.
Elemy grew quickly in terms of geography and funding. By 2022, it had a 14-state footprint. It also garnered investor attention, landing $323 million in venture capital funding, according to crunchbase.com. In October 2021, Elemy raised a $219 million Series B round that came with a $1.2 billion valuation.
A leading investor in the Series B round includes SoftBank Vision Fund 2, which is also an investor in Cerebral.
Elemy, founded as Sprout Therapy, won over investors by being able to prove that its software contributed to accelerated access to ABA services, improved outcomes and better patient and provider experiences, Yakubchyk said in a podcast. It was able to do that because it could test out software in the real world on its own.
“In retrospect, I probably would have used third-party call center teams or field operations teams for the onboarding of clinicians, for the onboarding of families, because as we build more software, we don’t really necessarily need as many people in-house doing its work for us,” Yakubchyk said.
Over the course of 2022, the company has shed much of the staff needed to support the ABA practice, Yakubchyk said. The company now only practices in California, Texas and Florida.
Most of the behavioral health providers that it still directly employs — both employees and contractors — are paid hourly and are largely independent. Eventually, through atrophy or other means, Elemy will only engage with clinicians through third-party interactions.
However, the company will still employ registered behavior technicians (RBTs). RBTs most often are the professionals treating children with autism under the direction of board-certified behavior analysts (BCBAs) or comparable clinicians. And Elemy will pair RBTs to its provider customers.
“We want to make sure that we’re involved in the care, in supporting the therapists on their journey and actually delivering the care without actually managing the therapists,” Yakubchyk said.
In April, Elemy launched Ecademy, a fully-paid 3-month training and certification program, in California, Texas and Florida.
Yakubchyk said that the company’s story with layoffs and investment is fundamentally different from the other ABA-related layoffs that have defined the year. Several private equity-backed providers have announced layoffs and are backing out of state markets as a result of workforce challenges and stagnant payer reimbursement.
“We don’t need as many people through the automation,” Yakubchyk said. “Private equity-backed ABA agency players are not investing in this sort of R&D at all. Rather, they are focused on cherry-picking insurance partners and providing care exclusively through clinics.”
Yakubchyk has said in multiple public appearances that the plan was always to expand Elemy beyond ABA and even behavioral health. In one appearance, he said he could see Elemy’s treatment-agnostic software playing in the entire in-home chronic care management sector.
“Taking a step back, pediatric behavioral health, like many verticals within healthcare services, is extremely nuanced, extremely complex,” Yakubchyk said. “I have a ton to learn about doing pediatric behavioral health. I think I can build a very, very large, lasting, impactful company that changes people’s lives just in pediatric behavioral health.”
At least for the next five years, he doesn’t see Elemy moving into any other health care verticals.