Quit Genius, Wondermind Cash In Despite Investment Slowdown

Several behavioral health startups have soldiered through a recent investment slowdown in the digital mental health space and secured funding.

Quit Genius, Wondermind, Kona, Caraway and Wysa, for instance, have all raised venture funding within the last few weeks.

During the second quarter, investment in digital mental health tumbled 53% year over year, after banner years for investment during 2020 and 2021. In total, 2021 saw about $5.5 billion in investment in digital mental health companies, according to data tracked by CB Insights.

Digital mental health’s experience is similar in the aggregate for digital health investment. Investment in digital health overall is down 40% in the first half of 2022.

Despite the downturn, virtual B2B addiction treatment provider Quit Genius, incorporated as Digital Therapeutics Inc., disclosed raising about $11.5 million of 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 it raised $64 million in an oversubscribed Series B round. In March 2020, it announced an $11 million Series A.

Quit Genius recently announced 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 on 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 establish healthy habits for their mental health. Incorporated as ​​Sike Insights, the company announced a $4 million seed funding round led by Unusual Ventures on July 26.

The company uses data generated from team chats to give managers insights into the status of their workforce. In turn, managers can use Kona tools to improve wellbeing, mental health and retention efforts in remote work settings, according to a news release. The company launched in 2019.

July saw investment rounds for other early-stage digital mental health such as the women’s digital health company Caraway.

Caraway focuses on college students and provides an integrated mental, reproductive and physical health care 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 can include gynecologists, psychiatrists, family medical practitioners, adolescent specialists, therapists, nurses and care coaches.

Through an app, Caraway customers can get 24/7 access to virtual care.

The largest digital mental health funding round of the last few 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 Breakthrough Device Designation as a digital therapeutic for chronic musculoskeletal pain and associated depression and anxiety diagnoses.

Wysa uses an A.I. platform that leads people through cognitive behavioral therapies and other meditation and mindfulness interventions. Wysa has facilitated over 400 million conversations with 4.5 million users in 65 countries, according to a news release. It has so far raised $28.5 million, according to CrunchBase.