Behavioral Health and Digital Therapeutics – Three $10M+ Investments

Ke Li Yew
Ke Li Yew

What we can learn from recent Series A investments of $10M+ in digital health startups

One of the most interesting areas for digital therapeutics (DTx) is its application to behavioral health (also referred to as mental health).

For several decades, many of the most prominent advances in behavioral health therapeutics were pharmacological—think Prozac and Ritalin.  However, as we have learned just from observing family and friends, people cannot simply take a drug that gives them total mental wellness. In-person therapy sessions continue to be used extensively. During therapy sessions, patients and their therapists can develop strategies for how to better manage daily life, or go through noninvasive, clinically validated treatments designed to address specific issues. However, the implementation of those strategies is largely left up to the patient once they leave the clinic. While it might be helpful in some cases, it is not feasible for a therapist to shadow the patient everywhere on a 24/7/365 basis to help the patient better react to the minute-by-minute realities of life. (Except perhaps as a Hollywood movie plot.)

DTx holds the promise in behavioral health of bridging the gap between what can be accomplished in a therapy session and what happens to patients in their daily lives.  As a result, DTx has been seeing a good deal of interest and activity in recent years.  For example:

This year, there have been a $10M+ Series A investments in digital health startups taking a range of therapeutic approaches to improving the mental health and wellbeing of patients.

  • Quit Genius, a digital therapeutic creator for addiction treatment, raised $11M in their Series A round.[1] Defining itself as “the world’s first and only technology-enabled digital clinic for multiple addictions,” Quit Genius “allows employees and health plan members to access a proven treatment program 100% remotely.” Quit Genius offers solutions for addictions to tobacco, vaping, alcohol and opioids. These solutions integrate multiple interventions and therapeutics, including digitally-delivered cognitive behavioral therapies, interactions with clinicians and coaches, pharmaceuticals, peer support, remote connected devices for monitoring, and biospecimen testing for monitoring.
  • Unmind is a startup providing small and large companies with a platform for employees to measure and manage their mental wellbeing through scientifically-backed assessments, and training programs made in partnership with world-renowned authors, experts and clinicians. Unmind also enables employers to access aggregated and anonymous data to make informed decisions about their wider mental health strategy. Unmind recently raised $10M in their Series A.[2]
  • Virtual reality therapy pioneer Oxford VR raised $12.5M in Series A funding.[3] This capital infusion will enable Oxford VR to accelerate U.S. expansion of its evidence-based and scalable automated solutions for behavioral health issues and to continue expanding its treatment pipeline into conditions such as anxiety, depression and post-traumatic stress disorder.

Taken together, these three firms illustrate four key digital health trends impacting the behavioral health and wellness space.

1. It can be hard to identify the line between a clinical- and consumer-grade digital health solution

Ten years ago, it was relatively easy to determine if the software in the healthcare space was subject to stringent FDA regulation or not. Software controlling an insulin pump or a prosthetic limb clearly fell into the regulated space. On the other hand, a CD-ROM that came with a self-help book that was advertised to help you lower your stress and increase your happiness was not something the FDA would be likely to worry about.

Today, as we begin to automate more behavioral health therapies, the line can grow much blurrier. In addition, since some of these solutions are being sold as employee benefits and not as prescribed therapeutics, digital health product firms develop a regulatory strategy that aligns with the business model. So perhaps initially a cognitive behavioral therapy (CBT) solution is sold through employers as an employee benefit. However, the revenue and data generated by the employees’ use of this CBT solution provide a path for the same product to eventually gain FDA clearance, followed by insurer reimbursement as a digital therapeutic.

The bottom line is that, even after digging much deeper into the websites of these firms, it’s still not always 100% clear if these firms are attempting to develop regulated medical devices now or have ambitions of moving to that in the future.  Don’t take this as confirmed facts, but our reading of the tea leaves on these firms’ websites and the web in general is that:

  • Unmind is not publicly discussing health plans or physicians as vehicles for getting their solution into the hands of patients.  Combined with the presumably low risk of their “therapeutic interventions” and the fact that those interventions are based (in part) on ideas from popular wellness authors, we assume they are flying well below the FDA’s regulatory radar.
  • Quit Genius started with a tobacco cessation program and then took advantage of FDA regulations changes triggered by COVID-19 that allowed them to expand into alcohol and opioid cessation.  Even if their full software suite is not subject to Class I, II or III regulations, presumably parts of it (e.g., their connected breath sensor) fall under the FDA’s software regulations, especially since they are targeting health plans as a channel to patients.
  • Oxford VR does not explicitly mention a CE Mark or FDA regulation, but their materials repeatedly refer to approvals based on strong evidence from research and clinical trials.  Safety and effectiveness were also on their mind in two recent tweets about the need for modernized FDA regulations:

2. Employers are a key target buyer for behavioral health and wellness services

Both Quit Genius and Unmind are focused, at least in part, on enabling employers help their employees to improve their overall health and wellness.

  • Unmind is specifically focused on their mission to provide small and large companies with a platform for employees to measure and manage their mental well-being.
  • “Quit Genius works predominantly with self-insured employers and health plans to help lower healthcare costs while improving employee satisfaction. It operates with a ‘fees-at-risk’ model with a performance guarantee, where clients are typically ‘paid back’ in the first 4 months.”

Both firms embed sliding scale calculators on their homepage that estimate the prevalence of health issues among their employees and then estimate the impact of these issues on employers using metrics such as days of work missed, the cost of related healthcare treatments and the cost of employee turnover.

Unmind- employes struggling with mental health based on number of employees in the organization

Quit Genius - employees struggling with addiction based on number of employees

3. Doctors and HR Departments don’t want to recommend silicon snake oil

FDA regulated or not, Oxford VR, Unmind and Quit Genius are all playing up their extensive expertise and data-driven scientific evidence that their programs work. Apparently and thankfully, no one wants to be remembered as the HR executive or doctor who fell for a con job from the next Theranos.  (Presumably, their new investors share that same fear and did their due diligence.)

 Bad Blood by John Carreyrou         The Sting - 1973 movie poster

In the following screenshots from all three startups, note the selection of these specific phrases:

  • Clinically backed
  • Clinically validated
  • Cognitive Behavioral Therapy
  • The latest research
  • Supported by research
  • Proven by science
  • We don’t want it to become the wild west

Quit Genius industry leading outcomes proven by science

Clinically Validated Programs

4. Digital health tools should assist behavioral health professionals, not replace them

In response to the endless questioning of if (or when) digital health software will eliminate the jobs of professionals, both Quit Genius and Unmind are built around a delivery model that still leverages clinicians to stay engaged directly with patients at the moments where human-to-human conversation and contact is still the most appropriate tool for intervention.

  • Unmind touts their ability to help their users connect to the right behavioral health professionals at the moment when it is most needed.

Unmind offers support hotline to fight mental health

  • Quit Genius emphasizes a combination of interventions that includes physician-led care teams and “quit coaches,” software-based cognitive-behavioral tools, pharmaceuticals and connected devices and other diagnostics for monitoring:

Quit Genius Interventions

  • The purpose of Oxford VR’s solution is to create immersive spaces that allow people to train their minds to overcome situations that were previously much more difficult to treat with therapy such as a fear of heights or anxiety provoked by social situations. In this sense, Oxford VR is targeting behavioral health problems where the current provider-delivered solutions were less than satisfactory.  (The VR setup is designed to be handled by a staff member when a patient comes into a clinic.)

Oxford VR created social engagement VR

Fear of Heights

Wrap Up

The application of DTx to behavioral health holds great promise for improving patient outcomes and bending the healthcare cost curve. We hope to check back on these three firms in a few years and find that their solutions have successfully scaled based on their proven ability to deliver on these goals.

In the meantime, if you think we should have specifically mentioned other promising (or proven) DTx in the behavioral health space, drop us a line!


  1. This round was led by Octopus Ventures, with additional funding provided by Y Combinator, StartUp Health, and Triple Point Ventures. This funding round augments past investments of funds from Village Global, Semper Virens, and Serena Ventures, as well as angel investments from Venus Williams, Eric Ries (the creator of The Lean Startup) and others.
  2. This round was led by Project A Ventures and also included Presight Capital, Felix Capital and angel investments from Chris Bruce, Michael Whitfield, and Matt Truman. Earlier investors in Unmind have also included Anthemis Group and Oksana Stowe.
  3. This round was led by Optum Ventures (owned by Optum, in turn owned by UnitedHealth Group) with additional funding from Luminous Ventures as well as prior investors including Oxford Sciences Innovation, Oxford University Innovation and GT Healthcare Capital Partners. Investors in prior rounds have also included the University of Oxford, Rt Capital Management and Force Over Mass Capital.


About Orthogonal

Orthogonal is a software developer for connected mobile medical devices (CMMD) and Software as a Medical Device (SaMD). We work with change agents who are responsible for digital transformation at medical device and diagnostics manufacturers. These leaders and pioneers need to accelerate their pipeline of product innovation to modernize patient care and gain competitive advantage.

Orthogonal applies deep experience in CMMD/SaMD and the power of fast feedback loops to rapidly develop, successfully launch, and continuously improve connected, compliant products—and we collaborate with our clients to build their own rapid CMMD/SAMD development engines. Over the last eight years, we’ve helped a wide variety of firms develop and bring their regulated/connected devices to market.

About the Authors

Bernhard Kappe is Founder and CEO at Orthogonal. You can email him at [email protected]

Randy Horton is VP of Solutions and Partnerships at Orthogonal. You can email him at [email protected]

Related Posts


Help Us Build an Authoritative List of SaMD Cleared by the FDA


SaMD Cleared by the FDA: The Ultimate Running List

White Paper

Software as a Medical Device (SaMD): What It Is & Why It Matters


Predetermined Change Control Plans: Seizing the Opportunity