In recent years, the need for behavioral health services has grown exponentially, driven by rising rates of mental health conditions, substance abuse, and disorders like autism. At the same time, stigma surrounding mental health has gradually diminished, leading more people than ever before to seek help. In response to this surge in demand, a wave of entrepreneurs has emerged, developing innovative solutions that are reshaping the behavioral health landscape. With funding flowing in from venture capitalists, the behavioral health tech industry has attracted hundreds of millions of dollars, aiming to meet the demand for care and tackle significant gaps in service availability.
The Rising Demand for Behavioral Health Services
Behavioral health conditions are pervasive in the United States, and the statistics paint a sobering picture. Suicide was the 10th leading cause of death in the U.S. in 2017, according to the Centers for Disease Control and Prevention (CDC). In the same year, over 70,000 Americans died from drug overdoses. This crisis has led to a growing demand for mental health services, with conditions like depression, anxiety, substance abuse, and autism affecting a large percentage of the population. For instance, the CDC reports that 1 in 59 children are diagnosed with autism spectrum disorder (ASD).
Despite these alarming numbers, the supply of behavioral health professionals has struggled to keep pace. The National Center for Health Workforce Analysis predicts that by 2030, the U.S. could face a shortage of over 21,000 psychiatrists. The growing prevalence of behavioral health issues, coupled with a lack of available professionals, has created a significant gap in service delivery, leaving many individuals without the help they need.
The Rise of Digital Behavioral Health Startups
As the gap between demand and supply widens, a number of digital behavioral health startups have stepped in to offer innovative solutions. Leveraging technology, these companies are finding new ways to deliver mental health care, enhance access to services, and improve coordination among providers. This digital health movement is supported by investors who recognize the potential for long-term growth in the sector. In fact, according to a report from CB Insights, behavioral health startups raised over $321 million in the second quarter of 2019 alone, a 41% increase from the previous year.
By combining technology with behavioral health services, these startups are changing the way mental health care is delivered, aiming to make it more accessible, affordable, and effective. Several high-profile companies in the sector have raised significant funding, and their success is a testament to the growing interest in this space.
Key Players in the Behavioral Health Tech Industry
1. Calm
Calm, a leader in the behavioral health startup space, raised an impressive $88 million in Series B funding in early 2019, followed by an additional $27 million in June. The funding round was led by TPG Growth, with other prominent investors like Ashton Kutcher’s Sound Ventures and Insight Venture Partners. Founded in 2012, Calm is based in San Francisco and has become one of the most recognizable names in the mental health and wellness space.
Calm’s flagship product is its mobile app, which helps users cope with anxiety, stress, and insomnia through meditation, relaxation techniques, and sleep stories. While Calm is not focused on addressing serious mental health conditions, it provides a valuable tool for individuals seeking to manage everyday stressors and maintain their mental well-being. With a valuation over $1 billion, Calm has earned the title of “tech’s first unicorn focused on meditation,” highlighting its significant impact on the market.
2. BlackThorn Therapeutics
BlackThorn Therapeutics is another notable player in the behavioral health startup space. The clinical-stage neurobehavioral health company raised $76 million in Series B funding in June 2019, bringing its total funding to $130 million. Investors in this round included GV (formerly Google Ventures), Scripps Research, and Johnson & Johnson Innovation, among others.
Founded in 2015 and based in San Francisco, BlackThorn is focused on using artificial intelligence (AI) to develop targeted therapeutics for brain disorders. By utilizing AI and machine learning, BlackThorn aims to create treatments that are personalized and more effective, helping individuals with behavioral health conditions such as depression and substance abuse. With the rise of precision medicine, BlackThorn’s innovative approach is positioning it as a leader in the development of next-generation therapeutics.
3. Quartet Health
Quartet Health, a New York-based company, raised $60 million in Series D funding in June 2019, bringing its total funding raised to $159.5 million. Investors in this round included Centene Corporation, F-Prime Capital Partners, and GV. Founded in 2014, Quartet’s platform aims to improve care coordination for individuals with mental health conditions by connecting physicians, mental health providers, and insurers.
Quartet’s platform enables providers to share information and collaborate on treatment plans, ensuring that patients receive holistic care that addresses both their physical and mental health needs. The company is helping to bridge the gap between different elements of the healthcare system, making it easier for individuals to receive the appropriate care and support for their mental health conditions. With its focus on improving coordination and collaboration, Quartet is positioning itself as a key player in the future of integrated care.
4. Noom
Noom, a health and wellness startup that raised $58 million in Series E funding in 2019, is another notable company making waves in the behavioral health space. The funding round was led by Sequoia Capital, with additional investment from high-profile backers such as Josh Kushner and Scooter Braun.
Founded in 2008, Noom initially focused on weight loss, but it has since expanded its offerings to include a broader focus on behavior change. Through its app, Noom combines psychology, technology, and personalized coaching to help users change their behavior, achieve sustainable weight loss, and improve overall well-being. While its primary focus is on healthy habits and weight management, Noom’s approach to behavioral health—particularly in terms of habit formation and long-term wellness—has earned it a strong following and substantial investor backing.
5. Talkspace
Talkspace, a virtual therapy platform, raised $50 million in Series D funding in 2019, bringing its total funding raised to $106.7 million. The platform connects users with licensed therapists through secure messaging and video calls, providing affordable and accessible therapy to individuals across the U.S. Its investors include Revolution Growth, Norwest Venture Partners, Qumra Capital, and Spark Capital.
Talkspace has gained significant attention due to its ability to provide mental health services in a convenient, user-friendly format. By offering virtual therapy, Talkspace eliminates many of the barriers to traditional in-person therapy, such as location, scheduling conflicts, and stigma. With the increasing demand for mental health services, Talkspace is well-positioned to expand its reach and impact in the coming years.
The Future of Behavioral Health Startups
As demand for behavioral health services continues to rise, digital startups are playing an increasingly critical role in meeting this need. With funding pouring in from investors, companies like Calm, BlackThorn, Quartet Health, Noom, and Talkspace are leading the way in creating innovative solutions to improve mental health care. These companies are transforming the landscape of behavioral health by making services more accessible, affordable, and personalized.
As the behavioral health crisis continues to unfold, these startups are poised to play a vital role in reshaping how care is delivered, ensuring that millions of individuals receive the help they need to live healthier, more fulfilling lives.
