16 mental health startups to watch, according to VCs

Investors may have cooled on healthtech, but the mental health sector remains a promising space with substantial unmet needs. To gain insights into the future of this field, Sifted consulted with venture capitalists (VCs) from notable funds like Boost Capital, Molten Ventures, UNIQA Ventures, InHealth Ventures, Calm/Storm, and NLC Health Ventures. Crucially, we asked them to suggest companies outside of their existing portfolios.

Changing investment patterns

In 2021, the boom year for VC funding, European mental health startups accumulated an impressive $1.2bn. Sadly, this figure saw significant declines since then. Investments plummeted to $343m in 2022 and continued their downward trajectory to a mere $80m in 2023. This drop mirrors a broader cooling within digital health funding.

However, the global mental health market is expected to be worth a staggering $38bn this year (representing 20% of the total digital health market). Consequently, despite the current investment slowdown, a significant opportunity awaits mental health startups that can successfully pitch their business to VCs.

VCs reveal startups on their radar

Let's delve into the recommendations from panel of VC experts from notable funds:

Kanjo Health (UK):

Kanjo revolutionizes the pre-diagnostic process for mental health conditions like ADHD and autism. Their innovative tool leverages the latest clinical insights, cutting-edge Bayesian networks (probability-based graph models), and advanced AI. This combination empowers Kanjo to produce personalized clinician tools that aim to reduce misdiagnoses, optimize resource allocation, and enhance patient monitoring precision. Notably, Kanjo was established by female founders Sophia Parvizi Wayne and Deepthi Upalla.

Alena (UK):

Alena provides personalized, app-driven therapy programs specifically designed to combat social anxiety. Its approach utilizes cognitive neuroscience-informed assessments and eliminates the need for a human therapist, adapting to users' evolving needs in a fully automated manner.

MeOmics (UK):

MeOmics breaks new ground in mental health by creating a unique tool to pinpoint the ideal drug therapy for severe mental illnesses. Their method integrates psychiatric and stem-cell data, establishing a biomarker database that drug development firms can leverage.

Selfapy (Germany):

Selfapy offers a digital therapy solution for individuals experiencing depression, anxiety, binge-eating, panic disorder, bulimia, and chronic pain. As part of Germany's DiGA initiative, doctors can prescribe this solution. Given the extensive waiting lists for mental health treatment across Europe (with Germany particularly impacted), Selfapy bridges the critical gap between diagnosis and the start of in-person therapy.

Samphire (UK):

Samphire focuses on combating the mental and physical symptoms women experience throughout their menstrual cycle. They employ an innovative medical technique called neuromodulation, which directly stimulates the brain to alter its activity. Their technology uses targeted, safe electrical pulses delivered to specific brain regions. This non-invasive method holds the potential to alleviate chronic pain, depression, and anxiety –– conditions often amplified during menstruation.

Mindstep (UK):

Mindstep is a pioneering brain and mental health app designed to detect and manage conditions such as dementia and depression. While addressing widespread mental health issues, it simultaneously generates valuable data for medical research. It stands out as the first comprehensive digital therapeutics platform tackling major brain health conditions within a single product. Mindstep's platform boasts over 50,000 real-world brain calibrations and delivers personalized care plans that significantly improve mood and cognitive biomarkers.

Blueskeye AI (UK):

Blueskeye AI harnesses machine learning to analyze facial and voice data, offering insights into an individual's physical or mental wellness. Their initial clinical application focuses on an app-based solution to monitor and manage depression and anxiety in women during the perinatal period. This is highly relevant since perinatal mental health challenges impact one in five women in England. Moreover, the long-term costs to the NHS and social services due to delayed access to care are estimated at £1.2bn per annual birth cohort. Blueskeye AI offers the possibility of improving health outcomes and reducing costs by enabling timely interventions.

Hibi Health (UK):

Hibi Health designs a care coordination platform geared towards families with children facing developmental differences and health conditions. Their system offers care management tools, tracking features, and access to expert guidance. A 2023 survey highlighted that approximately one in five young people in England experience a probable mental disorder. Hibi's platform addresses the challenges caregivers encounter in navigating complex care journeys, streamlining the management of their child's care.

Cumulus Neuroscience (UK): 

Cumulus Neuroscience excels in the areas of data collection and analytics. Their platform combines AI-powered analytics with an EEG (electroencephalography) headset, which monitors brain activity, enabling real-time remote data capture. By providing researchers with crucial data and insights, Cumulus aims to expedite the clinical trial process and ultimately accelerate the development of new therapies for patients.

Luca (UK):

Luca tackles a frequently overlooked segment within the mental health space by focusing on supporting athletes. Its mental health app specifically addresses concussion detection and treatment.

Thymia (UK):

Thymia pioneers technology for mental health assessments. They create app-based games that, when coupled with machine learning models, facilitate the assessment and management of various mental health conditions. Thymia's assessment methods integrate voice, video, and in-game behavior analysis, allowing for deeper examination of mental health conditions, signs, and indicators.

Tellmi (UK):

Tellmi offers an app-based mental health resource designed for young people. Users gain access to peer support communities, individual therapy options, and a collection of mental health resources.

Neotiv (Germany):

Neotiv has created a cognitive test embedded within a digital platform aimed at the early diagnosis of Alzheimer's disease and follow-up monitoring for memory-related issues.

HelloBetter: 

HelloBetter is a trailblazing company that offers online therapy courses. In Germany, these courses are available by prescription through the DiGA system, ensuring no cost to patients. The company reports assisting over 50,000 individuals and extensively publicizes its randomized controlled trials.

A Note on Mental Health Startups

The range of startups highlighted by these VCs showcases the diverse avenues of innovation happening in the mental health sector. From AI-driven pre-diagnostic tools and remote monitoring solutions to personalized therapy programs and athlete-specific support, these companies address a broad spectrum of needs.

As digital tools continue to refine, we can anticipate a greater integration of mental health support within our everyday lives. This offers enormous potential to increase accessibility, affordability, and early intervention for a wider population, leading to positive changes in overall mental well-being.

Additional factors driving growth in mental health startups

Beyond these investor recommendations, several key factors are fueling the growth of mental health startups:

Rising awareness and reduced stigma:

Conversations around mental health have become increasingly open in recent years. Individuals are more likely to acknowledge their mental health challenges and seek support, reducing the stigma that historically shrouded these conditions.

Pandemic-induced stress and anxiety:

The COVID-19 pandemic dramatically amplified existing mental health pressures and triggered new anxieties across populations. This surge in demand has fueled the need for innovative and accessible solutions.

Tech advancements:

Technological advancements in AI, machine learning, and data analytics are enabling startups to develop more sophisticated and personalized mental health tools. These advancements allow for greater precision in detecting conditions, tailoring treatments, and monitoring progress.

Shift towards preventative care:

Many health systems are transitioning towards a more proactive, preventative approach to care. Mental health startups align with this shift by offering early detection tools, self-management resources, and interventions to mitigate the escalation of mental health issues.

Growing acceptance of digital health solutions:

The pandemic accelerated the public's acceptance of telehealth and digital health tools. Mental health startups well-positioned within this landscape stand to benefit, as access to convenient and sometimes more affordable care increases.

Challenges faced by mental health startups

While the mental health startup scene is teeming with promise, it's essential to acknowledge the challenges these companies face:

Regulation and data privacy:

Navigating healthcare regulations and ensuring the robust protection of sensitive patient data can be complex hurdles, especially for early-stage startups.

Clinical validation:

Thorough clinical validation is critical to establish credibility and effectiveness. This process requires significant investment in time and resources.

Reimbursement models:

Integrating new mental healthcare solutions into existing reimbursement systems can be challenging, especially for startups offering innovative approaches.

Consumer adoption:

Gaining widespread acceptance and adoption of digital mental health tools can take time, despite the increasing need. Building sufficient trust and awareness is crucial for startup success.

The future of mental health startups

Despite the challenges, the future appears bright for mental health startups. With a growing global need for accessible services, coupled with advancements in technology and changing healthcare landscapes, there's optimism about the sector's potential.

We're likely to see more startups focusing on:

Precision mental health:

Personalized solutions based on an individual's unique genetic makeup, biomarkers, and lived experiences, offer the potential for greater treatment success.

Hybrid care models:

Combining digital tools with in-person therapy sessions could provide the best of both worlds: accessibility and the human connection vital for some individuals.

Employer-focused solutions

Stress and burnout in the workplace are pervasive problems. Startups offering mental health support directly to employers or via insurance plans stand to make a big impact.

The diversity of mental health startups highlighted by venture capitalists, combined with the broader market forces driving the sector, suggest a promising trajectory for innovation in this critical area. The unmet needs are vast, and the potential for digital solutions to improve accessibility, personalization, and preventative care is immense.

While challenges undoubtedly exist, a future where mental health receives equal attention and investment as physical health seems closer than ever before. The startups tackling this space with cutting-edge technology, human-centered design, and clinical rigour are setting the stage for positive transformation.

Tips for readers interested in mental health startups

If this exploration of the mental health startup landscape inspires you, here are a few ways to get involved:

Explore your options:

There are numerous mental health apps and digital platforms available. Research options that align with your specific needs, whether that's managing anxiety, seeking peer support, or building a toolkit for general wellbeing.

Check credentials:

If you're utilizing digital platforms for mental health support, prioritize options developed in collaboration with trained mental health professionals or backed by credible scientific research.

Don't hesitate to seek traditional support:

While digital tools can be incredibly valuable, they are not always a substitute for traditional in-person therapy. If you're struggling, reaching out to a qualified therapist is crucial.

Look for opportunities:

If you possess skills in tech, data science, healthcare, or design, there may be exciting career paths within mental health startups. Keep an eye on job boards and consider networking within this sector.

Advocate for change:

Break down stigma associated with mental health by having open conversations with friends and family. Let your elected representatives know that investment in mental health resources is important to you.

A call to action

Mental wellbeing impacts us all, directly or indirectly. By staying informed about cutting-edge developments, utilizing tools when needed, and advocating for change, we can collectively pave the way for a world where mental health is prioritized and supported.

Final Notes

Remember, this blog post explored just a select sample of promising mental health startups. With consistent innovation occurring, be sure to continue your research and discover other companies making a meaningful contribution.