Mental health received the most funding of any digital health care segment in the first half of 2024. 

Investors poured  $682 million into digital mental health in H1, according to a new Rock Health report. Overall funding in digital health care has seen improvement thus far, with fatter early-stage checks and the proportion of unlabeled deals declining. 

“It’s been a rocky few quarters, but the digital health sector is resilient—and we’re seeing measured momentum in funding and exits to prove it,” the report’s authors wrote.

If the second half of 2024 keeps pace with the first, total funding dollars and deal counts could exceed 2019 and 2023 levels. The years 2019 and 2023 are valuable comparisons, the report’s authors wrote, as they do not include outlier data from years impacted by the COVID-19 pandemic.

This uptick is especially notable given the dive in digital health care funding in 2023, which Rock Health also identified. In 2023, investors poured $10.7 billion into digital health, a clear decrease from the $15.3 billion spent in the segment in 2022. 

The report’s authors, in part, attribute the increased funding to an uptick in AI utilization, a trend that aligns with industry insiders’ predictions from late 2023. Mental health executives told BHB that AI was set to “revolutionize” the industry’s approach to care in 2024.

One in three dollars invested in H1 went to digital startups using AI, according to the Rock Health report.

Aligning with Rock Health’s findings, digital health companies have dominated the majority of funding rounds tracked by BHB in the first half of 2024.

While Rock Health noted that most of H1’s funding dollars came from early-stage deals, including Seed, Series A and Series B rounds, multiple behavioral health companies have also secured impressive late-stage rounds.

In June, virtual psychiatry provider Talkiatry raised $130 million, marking one of the largest recent funding rounds in the venture-capital-backed behavioral health space. 

Digital substance use disorder (SUD) provider Boulder Care raised $35 million in May in a Series C round, bringing the company’s total raise to roughly $85 million. 

In April, mental health tech startup Grow Therapy secured unicorn status when it raised $88 million in Series C funds, bringing the company’s total valuation over the $1 billion mark.

Virtual enterprise-level behavioral health startup Pelago raised $58 million in March, which CEO Yusuf Sherwani told BHB was “an easier fundraise than anticipated.” 

Also in March, digital psychiatry provider Brightside Health landed $33 million in a Series B round led by ACME Capital and Mousse Partners. 

Other smaller raises from H1 include digital peer-support startup Marigold Health’s $11 million Series A raise, virtual pediatric mental health provider Backpack Health’s $14 million Series A raise and mental health AI company Limbic’s $14 million raise.