5 VC Firms to Watch in Behavioral Health

This is an exclusive BHB+ story

While private equity investors are still the dominant player in traditional behavioral health care, venture firms have been making their mark on the sector, largely through digital plays.

Over the past two years, there has been a lull in venture capital investments, but industry insiders are projecting that to pick up this year. In addition to traditional venture firms, quite a few non-traditional investors, including the venture arm of health care systems and payer organizations, are set to become active players.

We’re also seeing more investors break out of the digital-only space and invest in brick-and-mortar locations and more serious conditions.

With all this in mind, Behavioral Health Business compiled a list of five VC firms worth watching in 2025.

In this week’s exclusive, members-only BHB+ Update, I explore:

–Which venture firms are actively investing in behavioral health

–Why non-traditional venture firms could make waves in the sector

–How venture firms are making investments beyond digital

CVS Ventures

Notable behavioral health portfolio companies:

• Array Behavioral Health
• Cortica
• Oui Therapeutics
• SpectrumAi
• Wayspring
• Vita Health
• Workit

Why we’re watching:

CVS Ventures, the investment arm of healthcare conglomerate CVS Health (NYSE: CVS), has invested in a diverse set of behavioral health companies, including those focused on autism, substance use disorder, suicide prevention, and mental health care.

Not only has CVS Ventures poured capital into mental health providers, but it is also often the lead investor. For example, it served as the lead investor in Array’s $25 million investment in 2023, Cortica’s $40 million Series D extension round and SpectrumAi’s $20 million Series A round.

CVS Ventures is part of the growing wave of non-traditional investors in health systems and payer organizations. What is interesting about investors like CVS Ventures is that they are positioned to fund startups that help tackle their specific pain points. Additionally, these companies are well positioned to go on to do pilots within the larger organization.

Considering that behavioral health services are driving up the cost for payers, and CVS has a payer arm, investing in products that could help reduce these costs makes sense.

“Behavioral care is perhaps the most suited to digital and telehealth deployment of all medical specialties, and there is a huge need nationally,” Andrew Holm, an advisor at Physician Growth Partners, told BHB in 2023. “Any company able to provide a solution to the care access problem will quickly become a leader in the space. CVS hasn’t historically had a robust behavioral solution, so investment in the space is a logical expansion of their capabilities and service offering.”

Autism Impact Fund (AIF)

Notable behavioral health portfolio companies:

• Auticon
• Axial Therapeutics
• BioRosa Technologies
• Cortica
• Floreo
• Healios
• Joshin
• Juniper
• MARAbio
• SpectrumAi
• Suggestic
• Yamo Pharmaceuticals

Why we’re watching:

AIF is unique because of its focus on autism treatment and research. In 2024, AIF closed its first fund with $60 million in capital. The fund invests in new diagnostics and treatment for people with autism, neurodevelopmental disorders, mental health and other complex chronic conditions.

It’s also worth noting that fund investors are interested in raising more capital in the near future.

“Now we have $60 million and we’ve deployed roughly half of it,” Male told me last April. “So we have dry powder to go do a handful more deals in the near term. But certainly, in the next nine-ish months, give or take, we’ll be looking at fund two. So we’re becoming that innovation and investment arm of the community.”

While AIF is still relatively young, it’s worth watching for its laser focus on autism and the IDD space. The autism treatment space has long been dominated by private equity investment, but as new innovative technologies and treatment modalities come on the market, that paradigm could be changing.

GV (formerly Google Ventures)

Notable behavioral health portfolio companies:

• firsthand
• Brightline
• Guidelight

Why we’re watching:

While venture capital has traditionally focused on digital-first behavioral health companies, GV is embracing a more diversified approach – backing both virtual platforms like Brightline, a pediatric mental health provider, as well as brick-and-mortar and hybrid care delivery models.

For example, firsthand uses a peer-support model to help patients access care. The startup even has peers with boots on the ground reaching out to patients in shelters, group homes or private residencies.

The other notable difference in GV’s investing is its interest in higher acuity behavioral health conditions. VC investments often focus on less complex mental health conditions. However, recently, GV has invested in firsthand, which focuses on serious mental illness, and Guidelight, which focuses on intermediate care, including intensive outpatient programs (IOPs) and partial hospitalization programs (PHPs).

“What’s not intuitive about SMI is that the costs for the most complex patients are driven almost entirely by medical costs,” Ben Robbins told me at INVEST 2023. “And so the trend towards carve-in and trying to combine medical and behavioral- I think it’s particularly focused on SMI, because the medical costs are astronomical in that population.”

.406 Ventures

Notable behavioral health investments:

• AbleTo (acquired by Optum)
• Cortica
• Equip
• InStride Health
• Nema
• Wayspring
• Family Well
• Better Life Partners

Why we’re watching:

.406 has quietly been investing in the behavioral health sector for decades. And it’s already seen a successful exit. The firm first invested in virtual mental health platform AbleTo in 2013. In 2020, UnitedHealth Group’s Optum bought the startup for an estimated $470 million.

The firm also has a diverse set of companies in its portfolio, including startups focused on autism, eating disorders, pediatric populations, and maternal mental health.

The firm further signaled its interest in behavioral health by announcing that former AbleTo CEO Trip Hofer would join the .406 team hot off a stint as CEO of Optum Behavioral Health Solutions.

Kaiser Permanente Ventures

Notable behavioral health investments:

• Big Health
• Headspace
• Groups Recover Together
• Mind24-7
• Nocd
• Proteus Digital Health

Why we’re watching:

Kaiser Permanente is one of the largest ‘payviders’ in the country, which inevitably gives it unique insights into the industry’s needs. Founded in 1997, it’s also one of the more mature venture firms in the health care industry.

And many of its investments show this maturity. For example, it invested in legacy behavioral mental health provider Ginger before its $3 billion merger with Headspace. We’ve even seen how they use these portfolio companies to support the rest of their business. For example, in 2022, Kaiser Permanente members got access to Headspace’s Ginger offering.

Still, Kaiser Permanente Ventures has been around long enough that not all of its bets have panned out. The fund backed the now-defunct digital pill maker Proteus. While Proteus wasn’t necessarily a behavioral health company, its demise is linked to the sector. Proteus created an ingestible sensor that could be paired with medication. It teamed up with pharma giant Otsuka on a “smart pill” for schizophrenia called Abilify MyCite. The move was marked with skepticism and eventually Proteus filed for bankruptcy.

Still, out of failure comes experience and knowledge. With Kaiser’s decades of experience investing in health care and its institutional knowledge as a payvidor, I would expect some smart bets on the space in the future.