Dealflow | July 1, 2024

Backpack Healthcare lands $14 million for youth mental health services

Lynnley Browning
Guest Author

Lynnley Browning

Maryland-based Backpack Health offers an AI-based app and teletherapy services for youth. It partners with the few providers who accept Medicaid for mental health services. Backpack’s $14 million Series A round was led by Chicago-based PACE Healthcare Capital with participation from ECMC, Techstars, Collab Capital, Rethink Education and other investors.

The funding comes a year after Black woman-led Backpack acquired Hurdle Health to connect diverse youth with therapists.

Youth mental health crisis

Some 27 million children under age 18 are on Medicaid. Yet amid America’s exploding mental health crisis, the government program for low-income individuals and households has just three providers specializing in disorders like depression and anxiety for every 1,000 enrollees of all ages.

More than four in 10 students reported feeling persistently sad or hopeless in 2021, and 29% cited poor mental health, according to the Centers for Disease Control. 

Private capital

Digital healthcare startups raised $1.1 billion across 77 global deals in the first quarter of 2024. Earlier this year, pediatric mental health startup InStride Health in Boston picked up $30 million in a series B round led by General Catalyst. Pittsburgh-based Blackbird Health, a youth mental health provider, raised $17 million in a series A round led by Define Ventures.