Digital Mental Health Investment Climbs to $700M in Q3

Digital mental health companies saw a slight increase in deals in the third quarter of 2022, after a disappointing first half of the year.

In total, there were 72 deals in mental health tech in Q3 worth a total of $700 million, according to new data from CB Insights. That’s up from Q2, which had a total of 70 deals worth $600 million.

The subtle uptick in funding comes as digital health investment as a whole continues to plummet. Health tech funding in Q3 was down by 36% quarter over quarter, according to CB Insights. This means that digital health investment was at the lowest it has been since Q1 of 2019.


Deals in the digital mental health space slowed down significantly in the first half of 2022 compared to 2021. Still, analysts have noted that 2021 was an outlier year for digital behavioral health deals.

In fact, deals in 2022 are expected to outpace digital behavioral deals in 2020 and 2019.

“When you put it in perspective of the economic headwinds that are out there for the entire industry and the pullback in deals of the entire industry, we’re looking at the deal flow to be still pretty healthy for behavioral,” Larry Kocot, principal at KPMG, told Behavioral Health Business in August, following new data from KPMG LLP, Epstein Becker & Green and FocalPoint Partners.


The average digital mental health deal size has decreased from $19 million in 2021 to $11 million year to date.

Alma, a health tech platform designed to help behavioral health providers work with insurers, led behavioral health funding in Q3 with a $130 million Series D funding round.

While Alma Health was the only nine-figure digital mental health deal in Q3, there were several deals worth eight figures. For example, Grow Therapy, Rippl and Oui Therapeutics all raised more than $20 million.

Despite the slight increase in funding, there has yet to be a new digital health behavioral health unicorn this year. Additionally, the digital mental health M&A market has flattened, with six deals in Q3.

SPAC and IPO exits continue to be rare in the digital behavioral health space as well, with one each in Q3.

While the bulk digital mental health deals (36) took place in the U.S., the market is also heating up in Asia. In Q3, digital mental health deals in the U.S. were worth $500 million. Meanwhile, Asia had 13 digital behavioral health deals worth $200 million.

Looking ahead, there have already been a number of new digital health deals announced in Q4.

For example, Mindful Care, a startup focused on offering virtual urgent mental health, raised $7 million in Series B funding last week. That funding, according to the company, will be used to help Mindful Care expand its current offerings to new markets, as it also launches “innovative individual therapy and addiction treatment programs.”

Additionally, NeuroFlow, which offers coordinated behavioral health services, landed $25 million in funding earlier this month.

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