Scoop: Brightside books $50M for mental wellness

Brightside Health, a virtual behavioral health startup, raised $50 million in Series B funding led by ACME Capital and Mousse Partners, Brightside CEO Brad Kittredge tells Axios exclusively.

Why it matters: Funds have been pouring into behavioral health, and there's no sign of the flood abating, with Brightside the latest example.

Details: Existing Brightside backers Bullpen Capital, Triventures and Trousdale Ventures also participated in the round, bringing Brightside's total funding to $75 million.

• In recent months, venture firms have backed multiple mental health startups, including Lyra, Daybreak Health, BetterUp, Calm and Marigold Health.

Context: Founded in 2017, San Francisco-based Brightside was online before the pandemic highlighted the shortage of mental health tools — something that initially presented challenges for its founders.

• "When we were getting started, a lot of investors were like, 'Can you even do this online? Is this safe?,'" Kittredge tells Axios. "Now we’re going into a new cycle where people are identifying niches and areas for consolidation."

How it works: Brightside partners with payers and providers to offer its services on a reimbursable basis, and with employers and individuals.

• When paying out of pocket, individual memberships cost $95 per month for medication management, or $349 for medication plus therapy.
• After answering a questionnaire to assess their symptoms, users are matched with a provider who establishes a care plan, including what medications might help.
• The company says it uses a "precision prescribing approach" to match users with the right medication based on their medical history and the specific features of their symptoms.

Flashback: Before starting Brightside, Kittredge worked at consumer-focused companies including Jawbone and 23andMe, where he says he "had a front row seat" to the clash between Silicon Valley's hyper growth mentality and the need to move slowly in health care, he tells Axios.

• "Fundamentally we just don’t believe mental health is a place to move fast and break things," says Kittredge.

Between the lines: While many digital health sectors are consolidating, industry observers and investors continue to see promise in niche mental health solutions, where there is a chance to offer highly personalized support to specific populations.

• That even includes investors who once believed the digital health landscape would grow overly crowded, such as Maverick Ventures managing partner Ambar Bhattacharyya.
• Behavioral health is "such a deep category," that it leaves room for startups of varying models, Bhattacharyya says. "There are so many companies, and they’ve all done so well, it’s pretty mind-boggling."

State of play: Competition in the sector is also driving a focus on outcomes, leading investors to become more selective in the startups they back, Aike Ho, a partner with ACME who led the investment in Brightside, tells Axios.

• "Over the past five years we’ve looked at pretty much every mental health company you can name," Ho says, and "this is our sole investment in the space."