A flood of state and federal funding to address the rising rates of anxiety, depression and more serious mental illness among young people has lifted many youth mental health startups in the last few years.
The next challenge for Hopelab, a nonprofit research and investment organization, is to mobilize financing for the kind of “upstream” interventions in the social fabric that could really have an impact on the mental health of today’s youths.
Key to the success of both kinds of investments is more authentic involvement of young people, which can inform both the efficacy of the approaches and whether teenagers and young adults will take advantage of them.
To be sure, psychiatrists, psychologists and other mental health care professionals are critical for managing the risk of harmful and inappropriate responses in AI-driven companions and chatbot therapists, as well as other mental health interventions.
But engaging young people as active designers, decision-makers and co-creators of youth mental health solutions can mitigate the misperceptions of even well-intentioned and well-credentialed adults.
“We’re investing in companies that help young people with eating disorders, with moderate to severe anxiety, with a whole range of things that are really clinical in nature,” Hopelab’s Margaret Laws tells ImpactAlpha’s David Bank on the latest episode of the Agents of Impact podcast.
“But there are also some interventions that we want to look at more upstream, things that help young people find purpose, that help young people feel like they’re contributing, that help them build connections and support and relationships.”
Youth playbook
Hopelab was launched in 2001 by Pam Omidyar, the wife of eBay founder and billionaire Pierre Omidyar, to develop Re-Mission, a video game for young cancer patients to experience what goes on inside their bodies during treatment. Omidyar, a former medical researcher, engaged young people with cancer, alongside doctors, nurses, psychologists and video game experts, to develop the video game.
Re-Mission helped shape Hopelab’s mission to advance the mental health and wellbeing of young people. In August 2020, Omidyar launched Hopelab Ventures as a nonprofit venture fund to invest in youth mental health solutions and catalyze other private investors. With its grants budget, Hopelab also backs research and civic engagement.
Now, Hopelab is leveraging its network of mental health-focused funders, researchers and organizations that are led or co-led by young people, to find investable opportunities in social connectedness and meaning.
Hopelab, alongside philanthropic backers including Prince Harry and Megan Markle’s Archewell Foundation, have poured more than $4.5 million since 2023 into the Responsible Technology Youth Power Fund, which supports youth-led organizations that are working at the intersection of responsible tech and mental health, AI ethics, online safety and climate change.
“We get the benefit of learning from all of those organizations in the ways that AI can be used to improve access to services like mental and wellbeing for their generation,” Laws says. “How do we actually learn from young people who are using them about what they feel about AI, where they believe regulation should be, and what they experience as sort of the guardrails that they think should be in place?”
Hopelab worked with the Philadelphia-based nonprofit Character Lab, before it closed last year, to develop scientifically-backed research on the social, emotional, academic wellbeing of young people in the US. Hopelab and Character Lab, through a partnership with Harvard’s Center for Digital Thriving and youth engagement nonprofit In Tandem, developed the “Youth Voice Playbook: Engaging Youth in Research,” a free guide for researchers on how to include young people in research that impacts them.
Treatment startups
COVID-19 was an inflection point for the global mental health market. Payments for teletherapy, AI-based treatments and other digital health interventions are helping drive revenues in mental health, which is growing at a compound annual rate of 4.2% and is expected to reach $650 billion by 2032.
Also, the total cost of not solving the mental health crisis is expected to reach $6 trillion by 2030, up from approximately $2.5 trillion in 2010, according to a study by the World Economic Forum and the Harvard School of Public Health. That would make the cost of poor mental health greater than the cost of cancer, diabetes and respiratory illnesses combined.
“When the pandemic happened, it opened up a lot of opportunities for folks who were not in this space before, and a lot of those are investors and folks in tech spaces, to really start thinking more deeply about solutions to youth mental health and wellbeing,” says Amy Green, who leads Hopelab’s research department.
Cost-effectiveness has become even more important as some of those public funding streams dry up. Digital and remote solutions are key for making treatments for, say, severe anxiety disorders and obsessive compulsive disorder for young people more widely available.
“It’s a balance of taking the technology and figuring out how you can safely use it to make things better, but not go to the place where you’re replacing the best clinical care and evidence that we know,” Green says.
“Should AI be used as a free therapist for young people? Probably not. Could AI really help clinicians discover new insights, increase the speed at which they can document their notes and provide supplemental care to young people? Probably yes.”
Hopelab Ventures, with funding from Omidyar Group, has invested in almost two dozen youth mental health tech startups. The nonprofit venture fund typically writes checks ranging between $125,000 and $1 million in pre-seed and other early stage funding rounds. AI-powered mental health solutions seem to be getting the most attention from investors (see, “AI-driven solutions to streamline mental health services for struggling youths”).
Hopelab’s venture portfolio includes Texas-based Hazel Health, which partners with schools and parents to offer virtual mental health care that helps students become more engaged in learning environments. The company hires care providers with diverse backgrounds and who are bilingual to deliver culturally-sensitive care.
Mightier, based in Boston, offers games and activities that are built on evidence-based pediatric research to help children and young adolescents manage their outbursts, anger, ADHD and other emotional challenges. And New York-based ReflexAI, whose AI creates role-play simulations to train and prepare mental health professionals on emergency situations like suicide.
“We really come in as a mission-first or impact-first funder,” Laws says. “When we’re evaluating companies, we’re really evaluating to the extent we believe that if they are successful, they can have an impact in the key pieces of our mission, which are increasing access, convenience, accessibility and equity.”
Investment ecosystem
The broader range of mental health interventions that Hopelab has supported with grants are starting to fill out is investment portfolio as well. MindRight has involved young people in creating a peer-to-peer mental health support community. Violet is providing cultural competence training to healthcare professions as a way to deliver better care for LGBTQ+ youths and young people of color.
“Because we know that in the healthcare and mental spaces in which we work, there is a big underrepresentation of people from Black, brown, LGBTQ+ backgrounds,” Laws says. “Violet wants folks in those populations to be able to work with therapists and providers who are culturally concordant and responsive.”
Hopelab invests in later stage rounds when it can help health tech companies advance its youth mental health mission, or to work more effectively with underserved populations. In 2022, Hopelab participated in the $40 million Series C round of Brave, a Miami-based company that provides virtual behavioral health care for low-income adolescents on Medicare.
Hopelab is looking to co-invest with smaller and newer investors that also are passionate about working with young people.
“We are seeing a rise in other investors, often family offices, who are really interested in getting into this space,” Laws says. “And one of the things we try to do is to help create opportunities for other investors to come in.”
