Mental health unicorn SonderMind has acquired the tech assets of its defunct competitor, Mindstrong.
SonderMind announced Wednesday that it has added the technology and select tech staff of Mindstrong to its company. Mindstrong ended patient services on March 10 as part of a wind-down of operations. The shutdown eliminates 128 positions, according to public documents released in February.
Mindstrong’s business included virtual behavioral health and AI-powered digital biomarker technology to track and influence care. Mindstrong has terminated all operations following this deal, according to a news release.
While SonderMind acquired the entire Mindstrong tech stack, SonderMind CEO and co-founder Mark Frank told Behavioral Health Business that SonderMind is integrating the Mindstrong electronic health record (EHR), clinical note functions, care planning and machine learning assets.
This move comes just months after SonderMind acquired Total Brain. SonderMind announced that acquisition in November. Total Brain gives users self-guided mental health support and other digital tools that are personalized by artificial intelligence.
“[Mindstrong] built their EHR capabilities … with an eye toward — and from a structural standpoint — supporting an AI or machine learning-driven approach,” Frank said. “This is one of the only EMRs that is favorable for data science to be able to create learning models against the data that’s being collected from the clinicians.”
The company’s next major focus is integrating its various technology acquisitions into a cohesive whole, Frank said.
SonderMind acquired its first artificial intelligence-focused tech company, Qntfy, in October 2021.
“We have these three buckets of Legos and we’re dumping them all out on the floor, and we’re going to figure out what we need to build,” Frank said. “There’s some overlap between them. But there are also some new things that we’re going to say, ‘What are the new pieces that we didn’t have any access to before and how can we build something amazing from those three different buckets?'”
Of all types of health care, Frank said mental health requires the most personalization. The company has sought to create a comprehensive solution to help people get to mental wellness in the fastest and most cost-effective way possible, he said.
SonderMind found itself among several digital or tech-focused behavioral health companies that announced layoffs going into 2023. In December, it cut about 15% of its staff.
Founded in 2014, SonderMind provides digital mental health care that’s enhanced with patient-provider matching technology and outcomes tracking.
Mindstrong raised about $160 million during its lifetime and secured a post-investment valuation of $660 million following a $100 million Series C funding round. SonderMind has raised $275 million, including a $150 million Series C round, according to Pitchbook Data Inc.
SonderMind continues to be an acquirer in the behavioral health startup realm.
In November, SonderMind acquired the mental health management app Total Brain for an undisclosed amount. The acquisition was expected to help SonderMind expand its services to offer personal-self care and mental health self-tracking tools. In turn, these data points can help therapists track clinical measurement-based outcomes and create personal care plans.
Companies like SonderMind could face a feast of acquisition targets if their balance sheets holds up during a moment of both an economic downturn and pull-back on the part of investors and banking institutions.
Since the flood of venture capital poured into digital health solutions, experts in the field have predicted that many startups will merge with other companies to get scale or to provide more diverse services to enterprise clients, especially payers.
Recently, PitchBook released a report saying digital health consolidation was key to the field’s continued success.
Along with the opportunity or need for consolidation, investors predict that the mental health space will see the most investment of any medical specialty in the next 12 to 24 months, according to a KPMG survey report.
Among behavioral health stakeholders, most see mental health services as the most attractive area for investment, according to a BHB survey.