In recent years, behavioral health venture capital has surged, with firms investing billions of dollars into companies across mental health, addiction, and specialized care services. Investors are recognizing both the urgent societal need and the opportunity to consolidate a fragmented market. Among the most active players in this space is General Catalyst, a Cambridge, Massachusetts-based venture capital firm with a portfolio of more than a dozen behavioral health-focused companies.
From Eleanor Health and Elemy to Rippl and SonderMind, General Catalyst’s investments span a broad spectrum of behavioral health services. Managing Partner Holly Maloney has been a driving force behind the firm’s efforts, ensuring that investments align with a holistic, whole-person care approach. “Behavioral health, in particular, has been a really strong focus area for us,” Maloney told Behavioral Health Business.
The firm emphasizes companies that provide integrated care rather than operating in isolated silos. This approach allows General Catalyst to support services ranging from autism treatment to eating disorder recovery, while promoting accessibility and lowering costs for underserved communities.
General Catalyst’s Expansive Behavioral Health Portfolio
Beyond its marquee investments, General Catalyst has also backed Circulo, Equip Health, and Osmind. The firm’s health care investment thesis focuses on making the system more personalized, proactive, and accessible. Maloney co-leads a 10-person health care investment team that seeks companies aligned with this mission.
General Catalyst also partners with 15 health systems, serving as a strategic innovation arm. Collaborations with Banner Health, Intermountain Healthcare, and Universal Health Services extend the firm’s impact beyond capital, driving operational improvements and enhanced patient outcomes.
While many firms only pivoted to behavioral health during the COVID-19 pandemic, General Catalyst has focused on this space since 2018, long before the crisis highlighted national mental health challenges. “This was … well before COVID, when the massive light was shown on the crisis that’s in our country,” Maloney noted.
Building an Ecosystem of Behavioral Health Companies
General Catalyst’s vision is to develop an ecosystem of companies that collectively reduce fragmentation and improve access. Since 2020, mental health startups have attracted growing behavioral health venture capital, with 225 funding deals in 2022 alone and over $7.5 billion invested across 2021 and 2022.
The firm has supported some of the largest rounds, including Eleanor Health’s $50 million Series C and Osmind’s $40 million Series B. “We’re just really focused on developing and investing in an ecosystem of companies that is going to together break down those silos that have existed between mental and physical health for a really long time,” Maloney explained.
Five Pillars of General Catalyst’s Investment Strategy
General Catalyst’s approach is built on five pillars: breaking down silos, expanding access, focusing on outcomes, embracing risk-taking models, and workforce support. SonderMind exemplifies the first two pillars by improving patient-therapist matching and enabling insurance participation. Rippl, a startup serving older adults with mental health conditions, reflects the firm’s focus on population-specific models and workforce development.
Maloney emphasizes workforce transformation as key to addressing the behavioral health workforce crisis. Rippl founder Kris Engskov leverages his experience running large-scale teams at Starbucks and in long-term care to implement innovative recruitment and training models.
Navigating Economic Uncertainty and Higher-Acuity Care
Although the economic environment may temper some investment activity in 2023, Maloney does not anticipate a major slowdown in behavioral health venture capital from General Catalyst. Portfolio companies like SonderMind, Eleanor, and Elemy have implemented staff adjustments to accelerate profitability and ensure long-term sustainability.
Looking forward, investment will increasingly target higher-acuity populations, addressing severe mental health challenges with high costs and historically poor outcomes. “We now really need to figure out how we are going to engage and care for the areas of the population where the outcomes are incredibly poor and the cost is really, really high,” Maloney said.
The Future of Behavioral Health Investment
The behavioral health sector remains a prime focus for behavioral health venture capital, and firms like General Catalyst are showing how an ecosystem-driven approach can drive innovation, improve outcomes, and expand access. By investing in holistic care models, workforce development, and higher-acuity populations, these investments are reshaping the future of behavioral health.
As the U.S. continues to face a mental health crisis, behavioral health venture capital is critical for accelerating innovation and ensuring care is accessible, effective, and sustainable. With strategic partnerships, ecosystem development, and a long-term vision, General Catalyst is at the forefront of a movement that could redefine how mental health services are delivered nationwide.
