Several behavioral health startups have hit a recent slowdown in investment in the digital mental health space and have secured funding.
Quit Genius, Wondermind, Kona, Caraway and Wysa, for example, have all raised venture funding within the past few weeks.
During the second quarter, investments in digital mental health fell 53% year-over-year, following banner years for investments during 2020 and 2021. In total, 2021 saw about $5.5 billion in investments in digital mental health companies, according to data tracked by CB Insights.
The digital mental health experience is similar in aggregate to digital health investments. Investments in digital health overall are down 40% in the first half of 2022.
Despite the slump, virtual B2B addiction treatment provider Quit Genius, incorporated as Digital Therapeutics Inc., disclosed raising about $11.5 million from a $15.3 million funding round through a Securities and Exchange Commission filing.
The New York City-based startup has seen previous success in raising capital. About a year ago, the company announced that it had raised $64 million in an oversubscribed Series B round. In March 2020, it announced an $11 million Series A.
Quit Genius recently announced that it was so successful with pilot programs in full-risk payment models that it has made them the company’s standard offering.
Another New York City-based startup, Wondermind, landed a $5 million Series A investment at a $100 million pre-launch valuation. The company will develop and launch online resources to help people develop “mental fitness,” according to its website.
Wondermind was co-founded in November 2021 by TV and pop star Selina Gomez, Daniella Peirson and Mandy Teefey.
Serena Ventures, the investment fund of tennis great Serena Williams, led the Series A round. Lightspeed Venture Partners, Sequoia Capital and former Allergan CEO Brent Saunders also participated, according to Fortune.
San Francisco-based startup Kona seeks to help people create healthy habits for their mental health. Incorporated as Sike Insights, the company announced a $4 million funding round led by Unusual Ventures on July 26.
The company uses data generated from team chats to give managers insight into the status of their workforce. In turn, managers can use Kona tools to improve wellness, mental health and retention efforts in remote work environments, according to a press release. The company started in 2019.
July saw early-stage digital mental health investment rounds such as women’s digital health company Caraway.
Caraway focuses on college students and offers an integrated mental, reproductive and physical healthcare platform. It came out of stealth mode with a $10.5 million seed funding round led by 7wireVentures and OMERS Ventures.
Caraway focuses on a team-based approach to care, which may include gynecologists, psychiatrists, family physicians, adolescent specialists, therapists, nurses and care coaches.
Through an app, Caraway customers can have 24/7 access to virtual care.
The largest round of digital mental health funding in recent weeks came from Boston-based Wysa’s $20 million Series B round. HealthQuad led the round. The new funding will help the company’s international expansion.
The Wysa platform has FDA discovery device designation as a digital therapy for chronic musculoskeletal pain and related diagnoses of depression and anxiety.
Wysa uses an AI platform that guides people through cognitive behavioral therapies and other meditation and mindfulness interventions. According to a press release, Wysa has facilitated over 400 million conversations with 4.5 million users in 65 countries. It has raised $28.5 million so far, according to CrunchBase.