Talkspace, an online therapy provider, is in talks to go public via a special purpose acquisition company. 

What Happened: The online therapy app, which is promoted by Michael Phelps and Demi Lovato, is in talks to go public via the SPAC Hudson Executive Investment Corp HEC, according to Bloomberg.

The deal would value Talkspace at $1.5 billion and could be announced this week, the report said. Bloomberg reported in November that the company was exploring a sale.

Why It’s Important: Talkspace offers services that link patients with licensed therapists by video chat and text. The company uses machine learning and artificial intelligence to analyze therapy sessions and detect trends in a patient’s behavior, which can lead to better treatment options.

Talkspace has a partnership with UnitedHealth Group Inc UNH, one of the largest insurance providers in the U.S.

Grants from the NIH were recently awarded to Talkspace to conduct telepsychiatry research with the University of Washington and Mental Health America.

In November, Talkspace acquired Lasting, a company specializing in couples' counseling.

Talkspace has strong brand recognition thanks to its celebrity promoters. Phelps was part of an HBO documentary, “The Weight of Gold,” that was sponsored by Talkspace.

The COVID-19 pandemic has led to a negative impact on mental health, and the field could be a future growth frontier in digital health care. 

The SPAC: Hudson Executive Investment raised $414 million in June with its SPAC offering. The company is led by Doug Braunstein, the former CFO of JPMorgan Chase JPM, and Doug Bergeron, who is the former CEO of Verifone.

Hudson Executive announced the launch of its second SPAC in December. 

Shares of Hudson Executive Investment Corp. were trading 3.01% higher to $11.62 at last check.