This is an exclusive BHB+ story.
Venture capital investments in behavioral health are emerging from a lull as firms recalibrate their priorities in 2024 and identify new strategic targets now that the sector is maturing.
Behavioral health, and in particular digital mental health solutions, saw an influx of capital in 2021, driven by the pandemic, with funding peaking around $4.9 billion, according to Rock Health. After that, there was talk of VC capital “drying up” around early 2022. Since then, VC funding dipped to a low of $1.4 billion in 2024. But behavioral health venture capital funding has recently been reinvigorated by investor conviction, a wave of new mental health startups and large growth funding rounds that target specialized, high-acuity services.
VC investments in behavioral health began the year with large capital rounds paid to platforms that target access and infrastructure, including a $210 million Series D round for Talkiatry, a $150 million Series D round for Grow Therapy,$80 million out of stealth for Salma Health and $40 million for AnswerNow’s telehealth applied behavioral analysis (ABA) services. All four of those mega fundraises took place during the first quarter of 2026.
VC investments across behavioral health during the second quarter of 2026 looked a bit different, with more attention to specialty services and slightly smaller, though still noteworthy, capital raises, including deals like Click Therapeutics’ $50 million Series D and a $30 million round for Instride Health.
Now that the market has matured past the COVID-induced telehealth arms race, venture capital funding is being prioritized for providers and solutions that have promising infrastructure and aim to improve access rather than merely investing in the promise of digital mental health.
Across all five VC firms that Behavioral Health Business is watching, one theme is clear: behavioral health is embracing technology, and the future belongs to strategic providers with scalable, tech-enabled, payer-aligned care models.
GreyMatter Capital
Noteworthy behavioral health investments:
San Francisco-based GreyMatter Capital is a venture firm that invests solely in mental health founders. It has a swath of behavioral health providers and tech-enabled solutions in its investment portfolio, but a handful have raised significant capital to scale in the last year.
In February, virtual psychiatry provider Talkiatry raised a $210 million Series D round, which was almost the total of all the funding it had received up to that point, bringing its total funding to roughly $452 million. The company will use much of the new funding to bolster its AI capabilities.
Another one of GreyMatter’s portfolio companies, pediatric psychiatric care provider Flourish Health, raised $26 million for its Series A round in July. Its goal is to scale high-acuity psychiatric care for youth populations.
Serious mental illness provider Vanna Health secured $17 million in a Series B round earlier this summer and will use the capital to enter new markets soon. The company also named a new CEO shortly before the fundraise. One of the new CEO’s goals is to deepen payer partnerships and wraparound services for patients.
Pediatric speech, occupational and physical therapy provider Coral Care, another GreyMatter investment, secured a $13 million Series A in February, and aims to connect families with therapists for in-home services. The company noted that with this funding, it will move to scale nationally.
Other noteworthy developments among GreyMatter’s portfolio companies this year include the acquisition of Valera Health by Mindoula in July. Terms of the deal were not disclosed, but Mindoula noted the deal was a move to expand its collaborative care model with established psychiatric services.
Another one we’re watching in this portfolio is Pelago’s announcement that it will transition from being historically a substance use disorder (SUD) care provider and expand into general behavioral health. Its first move in this vein was a wellness support chatbot capable of escalating issues to Pelago’s in-house clinical team.
Goldman Sachs Alternatives Growth Equity
Goldman Sachs Alternatives Growth Equity’s portfolio company Grow Therapy made headlines earlier this year when it secured a whopping $150 million Series D round in March 2026. That brought the digital mental health platform’s projected annual revenue to more than $1 billion. Prior to the large capital round, Grow Therapy made a strategic investment and acquired the AI scribe tool Tenor Therapy in February. The company’s last funding round prior to its Series D was an $88 million Series C in 2024. The new infusion of capital, coupled with its latest acquisition, positions it to make additional, scalable investments going forward in the sector.
Kaiser Permanente Ventures
Kaiser Permanente Ventures made BHB’s list of VC firms to watch in 2025, as well, but for different reasons. This year, the firm’s portfolio companies Headspace, Groups Recover Together and NOCD all were part of significant, strategic transactions.
Virtual mental health provider Headspace is set to be acquired by Sword Health in a cash deal reportedly valued at $300 million. The valuation is lower than some in the industry expected, particularly as many have had Headspace on their bingo cards as a company that could potentially IPO. The transaction comes just about one year after Headspace launched its direct-to-consumer therapy services. Sword Health, a New York City-based digital health provider, began making moves into behavioral health last summer and its valuation jumped to $4 billion. Sword Health’s CEO Virgilio Bento previously told HB that expanding capabilities into SMI care and growing its AI offerings, are part of its trajectory on its path toward a possible 2028 IPO.
Addiction treatment provider Groups Recover Together, another investment in Kaiser’s portfolio, made its first-ever acquisition in March 2026 and hinted that more activity in that vein is likely on the horizon. Its purchase of Better Life Partners deepens its resources throughout New England and introduces new care model elements that will allow the company to expand into new territories. Better Life Partners had been a bit of a distressed asset, with a series of financial and operational issues. Still, it had two assets that Groups wanted: virtual responsive care and walk-in clinic capabilities, CEO Cooper Zelnick, told BHB. Those are likely to scale further across the company over time.
Virtual OCD provider NOCD, another one of Kaiser’s portfolio companies, acquired trauma care provider Rebound Health earlier this year. Now the two entities operate under the parent identity “Noto.” The transaction follows a market trend BHB has been keeping tabs on, where several new providers entering the market are entering niche areas of care and adding on, rather than starting broad and trying to narrow. The deal added trauma-focused care capabilities, which NOCD did not previously provide. An ongoing priority now for the newly formed company Noto is to continue to add new services for other complex behavioral health conditions.
General Catalyst
Why BHB is watching:
General Catalyst has long been a powerhouse investment firm known for backing successful healthcare companies with venture investments. Throughout 2026, several of its portfolio companies were part of sizable transactions or on the receiving end of large capital infusions.
Late last year, General Catalyst led a $50 million funding round for New York City-based Radial, which provides clinic-based interventional psychiatry services like transcranial magnetic stimulation (TMS), Spravato, and neuromodulation treatments. Not only was the funding a vote of confidence from its investors, zooming out, interventional psychiatry is also on the rise across the industry as the latest hot commodity.
Following the $50 million Series A round, Radial acquired Mindful Health Solutions, a larger and older outpatient operator, this August for an undisclosed amount. Mindful Health Solutions has similar interventional psychiatry offerings and this single deal exponentially multiplied Radial’s geographic footprint. Radial is less than one year into its hold period with General Catalyst and anticipates tailwinds from the boom in interventional psychiatry will propel it further.
Also, as part of General Catalyst’s massive investment portfolio, Spring Health disclosed its plans to acquire digital mental health platform Alma in January. The transaction took place amid a wave of digital health dealmaking that began in 2026. Digital mental health is an area that is likely to continue to see consolidation following the explosion of solutions out of the pandemic, which is starting to balance out. Spring’s move to buy Alma skyrocketed its revenue expectations to $1 billion in its first year following the close of the deal, with its valuation rising to between $6 billion and $7 billion.
Other noteworthy developments among General Catalyst’s investments this year were also InStride Health’s $30 million Series C and Birches Health’s $20 million capital raise. Pediatric behavioral health provider InStride raised the capital at the beginning of 2026 and told BHB it plans to use it to expand into new markets. Birches Health’s funding came late in 2025, but has remained noteworthy in 2026, as both public and private audiences have renewed their attention on gambling addiction, which is one of its primary service lines. It’s likely there will be more expansion or consolidation in this area of behavioral and process addictions over time as concerns about gambling and social media rise.
HealthQuest Capital
Virtual autism therapy provider AnswersNow secured a $40 million Series B in January, marking its first fundraise since 2023. The company provides ABA care via telehealth with board-certified behavior analysts (BCBAs), which is typically a clinic-based service. AnswersNow executives said that following the new capital infusion, its focus will be on “aggressively” scaling its platform, eventually adding new service lines and expanding its use of AI. HealthQuest Capital successfully exited AmWell, another behavioral health company, in the past.
Companies featured in this article:
Alma, AnswersNow, Birches Health, Coral Care, Flourish Health, General Catalyst, Goldman Sachs Alternatives, GreyMatter Capital, Groups Recover Together, Grow Therapy, Headspace, HealthQuest Capital, InStride Health, Kaiser Permanente Ventures, Mindoula, Noto, Pelago, Radial, Spring Health, Talkiatry, Valera Health, Vanna Health
