Mental health startup graveyard: 542 dead companies, seven patterns

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Mentalium ✕

In 2021 Pear Therapeutics was valued at $1.6B and sold prescription digital therapeutics with FDA clearance. Two years later it filed for bankruptcy, and its assets went at auction for $6M. The regulator had let the product through, and then no health plan agreed to pay for it.

Why I went through 542 dead digital mental health companies

I spent a long time fighting anxiety and depression. Working with specialists is what moved things, and the biggest step forward came from cognitive behavioral therapy. CBT runs on a thought record, and the record only works if you fill it in while the thing is happening. I kept mine in a notebook, then in a spreadsheet, and in practice filled it two hours before the session, trying to remember the week. I never found a tool that fit, so I started building one.

Mentalium is a voice-first CBT diary. You rate your anxiety on a 1–10 scale, answer five CBT questions out loud, then rate it again. The model runs on the phone itself and sorts the transcript into the fields of the diary, so the audio never leaves the device, and a report exports to Excel for the therapist. The app is not therapy and not a treatment, it is a self-help tool between sessions.

Methodology in the project belongs to my co-founder Alexander Erichev, MD, PhD, psychiatrist and psychotherapist, professor at the Department of Psychotherapy, Medical Psychology and Sexology, North-Western State Medical University named after I. I. Mechnikov. He decides which CBT techniques go into the app and how the questions are worded.

Before putting years into a product here, I wanted to know why this niche has so many corpses in it. One story like Pear reads as bad luck. Post-mortems of digital health failures are usually case studies of thirty or so companies, and the large deadpool databases cover every industry at once. I found nothing of comparable depth on this niche alone, so we built it: 542 organizations, 2000–2026, up to 18 coded fields each. The full report is here: Mentalium mental health startup graveyard, 542 companies, 2000–2026.

How we counted, and what these numbers do not show

The subject is digital mental health organizations with a recorded outcome: shutdown, bankruptcy, acquisition, pivot or consolidation. After merging duplicates the graveyard came to 754, out of which we pulled 130 brick-and-mortar providers and 81 companies outside mental health, leaving the core sample of 542.

Each organization was coded on up to 18 fields: business model, who pays, how much was raised, reason for leaving the market, clinical evidence, medical co-founder, revenue model, exit size, country, years of operation. Sources were Crunchbase, CB Insights, Tracxn, public deadpool databases, app store removals, Ahrefs domain data and trade press, with every company confirmed against at least two independent sources. The report is generated from the dataset by a script, so no number was typed in by hand.

Now the limits, without which this reads as a sales deck.

Funding is disclosed for 322 of 542 companies (59%), and money cuts are computed on those only.

An acquisition is not a success: some deals are fire sales out of bankruptcy, and nowhere do I count an exit as a win.

Closure dates for products that died quietly are approximate, set by the last recorded activity.

About 67% of the projects are from the US and the UK, the US alone at 58%, so the findings describe the English-speaking market best.

The sample is a graveyard, not a random cross-section: shares compare groups against each other and are not a probability of failure.

Groups under 25 observations show a direction and not a precise value.

These are descriptive shares, not a statistical model. As a rough guide on this sample, a gap of about 10 percentage points between groups of this size is outside sampling noise and a gap of 5–6 points is not, which is why some findings below are stated as results and others as an absence of effect.

External benchmarks line up. Rock Health has mental health as the best-funded clinical category in digital health for years, and CB Insights puts about two thirds of global digital health funding in the US, close to our sample.

The baseline for the whole sample: 242 acquisitions (45%), 201 deaths (37%), 99 records in the gray zone of pivots and consolidation (18%). Mortality above 37% means a group did worse than the graveyard average. In the tables below, acquired and died do not add to 100%: the remainder is that gray zone.

How it ended: acquired 242 (45%), ran out of money 93 (17%), no product-market fit 79 (15%), squeezed out by consolidation 58 (11%), pivoted 41 (8%), regulator 14 (3%), outcompeted 9 (2%), lawsuits 6 (1%). More than half of all departures fall between 2021 and 2025, peaking in 2022, when the...