Backpack Health Raises $14M for AI-Backed Youth Mental Health Platform

Pediatric mental health provider Backpack Health, formerly Youme Healthcare, has landed $14 million in Series A funding.

Backpack’s services include a digital self-care app, virtual therapy sessions for children and teens, psychiatry and medication management and virtual resources for parents. The provider has developed an app that uses artificial intelligence to help monitor a client’s emotions and then match them with an appropriate therapist.

“The funding we have raised underscores the U.S. healthcare system’s need for more inclusive, tech-enabled solutions to tackle the growing pediatric mental health crisis,” Hafeezah Muhammad, Founder & CEO of Backpack Healthcare, said in a statement. “This milestone will help us deliver on our commitment to breaking down barriers and ensuring equitable access to mental health support for all children, regardless of their socioeconomic status.”


Part of Backpack’s mission is expanding access to mental health services for children with Medicaid coverage. As part of that effort, the startup works with payers that accept Medicaid.

The provider currently operates in Maryland and Virginia, but plans to use its new funding round to launch in other state markets and grow its teletherapy services, according to a statement. Backpack also intends to use the money to expand its partnerships with payers, government agencies and schools.

PACE Healthcare Capital led the round with participation from ECMC, Techstars, Collab Capital, Bridge Builders Collaborative, Portland Seed Fund, Hopelab, Rethink Education, Genius Guild, and Unlikely Collaborators.


Overall, funding in the digital behavioral health space has dropped significantly since its peak in 2021. Last year virtual behavioral health companies raised a total of $1.2 billion across 65 deals, according to Rock Health data. Comparatively, investors poured $2.3 billion into the space in 2022 and $5.7 billion into the market in 2021.

While digital health funding has slowed down over the past few years, a number of youth-focused providers have been able to woo investors.

For example, in February, hybrid youth mental health platform Blackbird Health raised $17 million in Series A funding. Additionally, Cartwheel Care, a pediatric digital mental health service that partners with school systems, landed $20 million at the end of 2023.

Large behavioral health platforms are also looking to expand their pediatric reach. For example, virtual provider Talkspace (Nasdaq: TALK) has teamed up with the city of New York and Baltimore County Public Schools (BCPS) to provide access to its services.