Minneapolis-based technology platform Kyros has secured $10.5 million in funding to grow its substance use disorder recovery platform.
Existing investor Rally Ventures, a Minneapolis-based venture capital firm, led this round, according to a Sept. 19 news release.
Launched by CEO and president Daniel Larson in 2021, the Kyros platform is designed to connect those working to recover from a substance use disorder with certified peer recovery specialists. Since its launch, the platform has served more than 5,000 clients services from over 400 certified peer recovery specialists, according to the release.
“Kyros is defining the next generation of recovery by recognizing that preventative care happens more and more outside the four walls of a treatment center,” Larson said in a statement. “Our community-based approach, combined with the data analytics enabled by our technology platform, is incredibly powerful. We’re enthusiastic about channeling our investments into broadening access to services for more individuals in need, as well as advancing the refinement of tools crucial to enhancing both client and service provider outcomes.”
Larson stepped away from his career in tech in 2019 after he realized he was facing his own substance use issues with alcohol, something that had taken the lives of multiple family members. During that time, Larson found himself at a treatment and recovery center where he saw social workers and health care workers doing a range of tasks, some of which he believed could be automated. He also noticed a disparity between labor supply and demand for substance use disorder care.
“On top of the pandemic, there’s an opioid epidemic that’s just devastating communities… I worked on my own personal mental health and physical health throughout the pandemic and I decided that I wanted to do something meaningful with my skill set,” he told TCB Thursday.
Kyros gives organizations and individuals the structure to become eligible providers of peer recovery services. Once certified, those organizations or individuals then provide and chart those services, which are billed to insurance by Kyros. Kyros takes the service fee from this and pays the individual or organization what’s left.
Kyros now serves as a tool for about 160 organizations across Minnesota. Because of this, services are able to reach all corners of Minnesota, he noted. The company has around 55 employees in downtown Minneapolis. These employees don’t include the peer recovery specialists contracted with the company.
It’s important to note that, to be a peer recovery specialist, a person must also have recovered from a substance use disorder, Larson said. Kyros pays for the training needed to get certified as a peer recovery specialist. Then, those workers work as 1099 contractors.
The company started out with a $500,000 angel investment led by Bob Naegele III.
“It was really important for us, especially early on because of our Minnesota focus, to take local investment from people who really cared about the folks that we were helping,” he said. “We were so helping people in our backyard.”
In the world of business and technology, it’s often easy to lose the human elements of a problem, Larson said of working in the care and recovery field. “It’s so intangible that we overcomplicate it and it becomes too big, and then nobody does anything. Our model simplified down is: somebody who desperately needs help needs to be able to get in touch with somebody that is available and qualified to help them.”
Rally Ventures also led a $4.4 million Seed round for Kyros in March 2022, according to a Rally Ventures news release from last year.
“Kyros is demonstrating the ability to significantly move the needle on client health outcomes by filling the gaps inherent in the existing industry model,” Rally Ventures managing director Justin Kaufenberg said in a statement. “Kyros has become a critical partner for industry incumbents to efficiently manage peer recovery services, so they can remain focused on their core mission and services. Our continued support is a commitment to fostering innovation that doesn’t just drive financial success, but also drives meaningful, lasting impact.”