Mental health startup graveyard v1.2: 542 dead companies, seven patterns

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Mentalium ✕

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

What is new in version 1.2 of the study

This is the second edition. The first one drew fair criticism from readers here, both on how the catalogue was formatted and on how the text read, and this version answers it. The layout of the company catalogue is fixed. The prose is rewritten from the first page to the last. The open dataset is now linked from inside the report, where it belonged from the start.

Nothing moved in the numbers. The sample, the coding and the arithmetic are the same as in the first edition, so every figure below is what it was. The report itself got shorter by about 45 pages, because a lot of it turned out to be filler.

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 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. In practice I 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 CBT diary. You rate your anxiety from 1 to 10, 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. A report exports to Excel for the therapist. The app is a self-help tool between sessions, and it does not treat.

Methodology 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. The result is the full report on 542 dead mental health companies, and the rows it is computed from are in the open dataset under CC BY 4.0.

How we counted, and what these numbers do not show

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

Each organization was coded on up to 18 fields, among them the business model, who pays, how much was raised, the reason for leaving, clinical evidence, a medical co-founder, the revenue model, exit size, country and years of operation. Sources were Crunchbase, CB Insights, Tracxn, public deadpool databases, app store removals, Ahrefs domain data and trade press. Every company was confirmed against at least two independent sources. A script builds the report from the dataset, 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 rather than 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 sits outside sampling noise, while a gap of 5–6 points does not. That 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...