Hi friend,

It’s been one of the most interesting weeks in mental health for a while. There’s no massive funding news, but so much industry news, new data and research for us to consider.

Let’s get into it!

⏺️ NightWare secured $1.4M as part of an ongoing round. The funding will accelerate VA pilots of the FDA-cleared wearable therapeutic for PTSD-related nightmare disorder. (link)

⏺️ Clean Slate Clinic closed a A$4.3M capital raise. The Australian addiction treatment provider raised the funds with a A$2.8M convertible note and A$1.5M debt facility. (link)

⏺️ Newfund closed a €60M fund dedicated to brain technologies. The Paris-based VC is one of the few European funds investing exclusively in the space, and will focus on writing $1M-3M cheques into seed rounds of startups ranging from neurology to psychiatry. (link)

⏺️ Sheppard Pratt, a Baltimore hospital, received $16.5M in Maryland state funding to develop a children's psychiatric hospital. (link)

⏺️ Psychedelic companies raised $348M across 11 deals in Q1 2026. The data from Psychedelic Alpha shows a slight dip from Q4 2025 but another strong quarter for investment in this space. Compass Pathways captured the bulk of Q1 funding with their $150M raise. (link)

⏺️ APA Labs launched their Digital Badge Program and Digital Solutions Library for mental health technology. Developed in partnership with digital health evaluation firm ORCHA, the badge provides independent third-party assessment across six domains including clinical evidence, user safety, and AI transparency and aims to bring greater transparency to the ecosystem of mental health tech products. (link)

⏺️ Joy Bot launched as India's first belief-adaptive AI companion for emotional wellness. The product built by Coto represents growing innovation in culturally tailored AI mental health tools in markets where traditional therapy access remains limited. (link)

⏺️ California's Department of Health Care Services published an independent impact report on BrightLife Kids and Soluna. Kooth operates Soluna (ages 13–25) and Brightline operates BrightLife Kids (ages 0–12), two digital health platforms operating under a massive ($500M+) state contract. Since launch in January 2024, the platforms have reached 500,000+ children and families across all 58 California counties. The main report cites a bunch of strong self-reported satisfaction measures for both solutions but has a distinct lack of validated clinical outcomes or ROI. The report does reference independent research of a single-arm study from Northwestern University - which is currently under peer review - which found statistically significant reductions in distress at one month, sustained at three months and improvements in other secondary outcomes. I’m trying to be positive about this thing, but it’s very disappointing to spend over half a billion dollars on a program and have such limited research on its impact. So far, we have high level metrics on usage, some self reported satisfaction measures and a pre-print of a single-arm trial with 98 participants. For a half a billion dollars?? (link)

⏺️ Trump signed an executive order to accelerate psychedelic research and access. The order directs ARPA-H to provide $50M in match-funding for state psychedelic studies and tasks HHS and the VA with expanding trial participation and data sharing. On the same day, FDA Commissioner Marty Makary announced IND clearance for Ibogaine. As always, Josh Hardman has all the details and commentary for anyone interested in learning more about this. (link)

⏺️ CMS confirmed more than 150 participants accepted into the ACCESS model. The group includes a notable cluster of mental health companies — Headspace, Headway, SonderMind, Limbic, Jimini Health, and Slingshot AI among them. The 10-year outcomes-based Medicare payment programme launches this July with a dedicated behavioural health track tied to PHQ-9/GAD-7 improvement. (link)

⏺️ Switzerland approved Deprexis for prescription and insurance reimbursement starting July 1. The German digital psychotherapy app for depression becomes the first digital therapeutic of its kind authorised by Switzerland's Federal Office of Public Health. (link)

⏺️ AMGA partnered with Talkiatry to expand in-network psychiatric access for member health systems. The deal gives American Medical Group Association members access to Talkiatry's 800+ employed psychiatrists across 100+ insurance plans. (link)

⏺️ Optum/United Healthcare expanded NeuroStar TMS coverage to include psychiatric mental health nurse practitioners across 26 states and Washington D.C. (link)

⏺️ Trilliant Health's 2026 Behavioural Health Report found US demand has surged 62.6% since 2018. Prevalence of mental illness grew 5.7 percentage points from 2008 to 2024, affecting nearly one in four American adults. By 2038, projected demand will exceed supply by 36,780 full-time equivalents in adult psychiatry and 99,780 in mental health counseling. Untreated mental illness cost the U.S. economy an estimated $477.5 billion in 2024 and is projected to exceed $1.3 trillion annually by 2040. The report is full of interesting data and I’ll be posting about it on LinkedIn tomorrow. (link)

⏺️ Georgia has fined 11 insurers $25M for mental health parity violations this year. Reporting from Becker’s Behavioral Health noted that Regence BlueShield, Premera Blue Cross, and Cigna are all among those penalised. (link)

⏺️ Federal agencies moved to significantly revise the Mental Health Parity and Addiction Equity Act. This has understandably drawn concern from healthcare leaders who are worried that weakened enforcement will widen behavioural health access gaps at a time of rising demand. It’s a weird time for mental health parity in the US. (link)

⏺️ One Mind held Demo Day for its 2026 Accelerator cohort. The fourth cohort of 14 companies presented at the closing week of the accelerator in Palo Alto. Prior cohort alumni have now collectively raised nearly $1B and this year’s cohort includes several of the most interesting businesses I’ve seen in mental health. (link)

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⏺️ A conversational AI platform outperformed in-person group therapy for anxiety in a randomised trial of 995 university students. The 12-week RCT compared the AI platform Kai to face-to-face group therapy and waitlist control. Kai showed statistically greater improvements in anxiety symptoms, life satisfaction, and wellbeing. This is an interesting study worth reading. (link)

⏺️ AI analysis of 29,005 psychiatric notes found negative language significantly increased the odds of a schizophrenia diagnosis, with the effect most pronounced for Black male patients. The study demonstrates how AI can quantify clinician bias and reveals diagnostic disparities beyond traditional demographic factors. Heads-up, the paper has not yet been peer reviewed. (link)

⏺️ A preprint found that LLM sycophancy stems from models incorrectly assuming users want validation rather than honest assessment. The Verbalised Assumptions framework surfaces these implicit assumptions and shows they can be causally intervened on — reducing sycophantic behaviour without degrading task performance. The study noted that people expect more objective and informative responses from AI than from other humans, but LLMs trained on human-human conversation do not account for this difference in expectations. This is an important finding for those building conversational AI solutions in mental health and worried about sycophancy. (link)

⏺️ An analysis of 500,000+ de-identified Microsoft Copilot health conversations found nearly 1 in 5 involved personal symptom assessment or condition discussion. Published in Nature Health, the study found emotional support and symptom queries spiked at night and that 1 in 7 personal health queries concerned someone other than the user. (link)

⏺️ An Austrlaian trial tested brief smartphone interventions in 1,282 Australian university students with depression, achieving 40.9% remission rates. (link)

⏺️ A meta-analysis of 10 RCTs found mobile CBT apps produce moderate improvements in adolescent depression (Cohen's d = -0.24), with sustaining long-term benefits identified as a key challenge for developers. No significant effects were found for anxiety (d = -0.16), but improvements were observed in quality of life (d = 0.37). (link)

⏺️ Researchers analysed Koa Health's Mindset app and found it incorporates all 16 core CBT techniques across 393 intervention pages. The content analysis approach offers a model for validating therapeutic fidelity in digital mental health products. (link)

⏺️ FamilyWell’s tech-enabled perinatal collaborative care model delivered clinically meaningful depression and anxiety reductions in 185 OB/GYN patients. Published in Maternal and Child Health Journal, the retrospective cohort study of FamilyWell’s care model (who we featured recently) found treatment responses of ~47% for depression and ~52% for anxiety and ~30% of patients achieved remission within 3.5 months. Engagement was very high with 80% of referred patients enrolled in the program and 70% completed intake within one week. (link)

⏺️ CBT, behavioural activation, problem-solving, and life-review therapy all outperformed care-as-usual and waitlist controls for depression in older adults. A network meta-analysis by Cuijpers and colleagues in International Psychogeriatrics confirmed these therapies are effective in this population, though the authors note supportive therapy effects may be underestimated given its frequent use as a control condition. I’m increasingly interested in solutions serving older populations, including Vitalic Health who were part of the One Mind Accelerator mentioned above. (link)

⏺️ A Lancet Psychiatry review argued clinicians should actively harness placebo effects rather than treat them as noise. The authors highlight that recent therapeutic device trials for depression have seen placebo-group remission rates nearing 50%, and propose practical strategies including open-label placebo, nocebo reframing, and conditioned dose reduction. (link)

⏺️ An 8-year prospective study of 104 children with ADHD found multimodal MRI combined with machine learning predicted adult functional outcomes with 81.6% accuracy. The findings represent a meaningful step toward precision psychiatry for ADHD prognosis and early intervention. (link)

That’s all for this week.

Keep fighting the good fight!

Steve Duke

Founder of Hemingway

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