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The student-managed Steven Tarrson Impact Investment Fund at Chicago Booth’s Rustandy Center for Social Sector Innovation is proud to announce its investment in Harmon Care, a telehealth startup that partners with primary care doctors to meet the overwhelming need for accessible and affordable quality mental health care among adults in the US.

The Tarrson Fund, one of the largest student-run impact investment funds in the country, provides critical catalytic capital to early stage mission-driven companies. Booth MBA students drive the entire investment cycle, from sourcing and pitching deals to financial and impact diligence and making investment decisions. 

This is the Tarrson Fund’s third investment, and its first one in the healthcare sector. In 2022, the fund invested in Harvest Thermal, a home heating company whose smart thermal battery system slashes carbon output, lowers monthly heating bills, and supports a fully renewable grid. Earlier this year, the fund invested in Kadeya, a startup that is taking on the $40 billion single-use plastic water problem with the world’s first closed-loop vending kiosk. 

Harmon Care partners with primary care practices to provide virtual therapy and psychiatric consultations to adults in rural areas. One of the primary areas of focus is the growing number of  older adults on Medicare and Medicare Advantage, a fast growing population that often needs coordinated behavioral health care for reasons such as loneliness, chronic pain and illness, and grief from losses. 

The Tarrson Fund made a pre-seed investment of $50,000. The team was impressed with the company’s potential for impact in improving healthcare outcomes, the focus on a demographic projected to grow rapidly, its unique distribution and reimbursement model, and the founders’ commitment to their mission.

Tarrson Fund managing partner Nevin Ramanujan,’23, said Harmon Care stood out as the team used both financial and social impact lenses to evaluate potential investments. “Access to care often determines health outcomes,” he said. “Harmon Care enables access to improve outcomes in three ways - by partnering with rural health systems, offering a collaborative care model, and lowering the financial burden by making the treatments reimbursable through collaborative care.”

About 15-20 percent of the 30 million adults currently on Medicare are estimated to have behavioral health needs. They often do not seek help because of lack of providers, paucity of affordable options, the stigma of seeking mental healthcare, or insufficient information. The US population of adults over 65 is projected to grow explosively. By 2035, as many as 15 million seniors are expected to need help with behavioral health disorders.

Primary care physicians often lack the specialized expertise, time, and resources to provide their patients with easily accessible treatment options. 

”Harmon Care was very compelling because it reaches older adults in rural geographies with few mental health providers, and their therapists who specialize in caring for the evolving needs of older adults,” said Rachel Huynh, who was the scout and co-investment lead on the deal. She noted that the team was also impressed with the founders’ drive to serve the aging population.

Maayan Teper, who co-led the deal, said Harmon Care’s decision to partner with rural healthcare providers, instead of going direct to consumers, was one of the key factors that differentiated the company from the many telehealth companies that emerged in the wake of the COVD-19 pandemic . “The focus on the rural market and the smart go-to-market strategy of partnering with primary care physicians makes them unique in the mental health space,” he said. 

Harmon Care CEO Jesse Weinberg said he had a great experience working with the Tarrson Fund team. “They asked really thoughtful questions,” he said. “It was clear that they really wanted to understand both the business viability as well as the mission of the company before moving forward with an investment." 

Teper described the experience as invaluable. “Experience with deals plays a huge role in venture capital. The sooner you get it the better. But you don’t always get an opportunity to lead early. The Tarrson Fund gave us that opportunity,” he said.

Huynh came to the Tarrson Fund with a background in healthcare, policy and management consulting, but was new to investing. “It was a great opportunity to step into an investors’ shoes,” she said. “It was amazing to meet the founders and have the opportunity to support an investment we believe in from an equity and sustainability perspective. It felt like we were building something together.”

Ramanujan had plenty of hands-on experience in healthcare deals prior to Booth. As he looks to build the healthcare investing practice at a local Chicago venture fund, he says the Tarrson Fund gave him the opportunity to develop the skillsets needed as an emerging fund manager, and also demonstrated the value of a flat organizational structure. 

“Healthcare investing is highly specialized, and the Tarrson Fund gave me the opportunity to mentor a team of highly qualified individuals from sourcing to execution in a highly collaborative and non-hierarchical structure.,” he said. “Working in a flat team fosters greater discussion and a shared mindset supplemented by our complementary experiences. It’s the best way to get the best outcomes.”

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