Exclusive: Mental health messaging app Wysa raises $20M

Wysa, developer of an AI-powered mental health messaging tool, raised $20 million in Series B funds to expand its presence in the U.S., U.K. and India, co-founder Ramakant Vempati tells Axios exclusively.

Why it matters: Digital behavioral health companies have seen an uptick in investor interest as demand for mental health support dramatically outpaces the supply of trained professionals.

Deal details: HealthQuad led Wysa's round and was joined by British International Investment.

• Insiders including W Health Ventures, Kae Capital, Google Assistant Investments and pi Ventures also joined.

🐧 How it works: Wysa uses conversational AI — in the form of a friendly penguin — to guide users through exercises based on cognitive behavioral therapy (CBT), an evidence-backed form of treatment for depression and other disorders.

• The tool can also refer users out to other behavioral health services or crisis support, and Vempati emphasizes: "This is not crisis support; it’s fully intended as a wellness service."
• In addition to its DTC offering, Wysa has a B2B offering that serves customers including Accenture, Colgate-Palmolive, Aetna International, Swiss Re, the U.K.'s National Health Service (NHS) and Singapore's Ministry of Health.

Yes, but: Wysa doesn’t facilitate one-on-one therapy sessions; it instead provides a chatbot that walks people through mental health exercises.

• While that's a potential benefit amid staffing shortages, it also limits the depth and breadth of services it can provide, academics and investors tell Axios.
• Woebot, a San Francisco-based mental health chatbot maker, has a similar approach. Woebot's last big fundraise in 2021 valued the company at $230 million.

By the numbers: Wysa has 4.5 million users across 65 countries, Vempati says.

• The company's revenue doubled this year compared with last year and is on track to double again this year, he adds.
• A small, Wysa-sponsored study published in 2018 in JMIR mHealth suggested the app helped reduce participants' depression symptoms but noted that more research was needed to validate the findings. (Wysa is currently working on more studies with the NHS and others.)

State of play: Investor dollars have poured into several such companies in the last six months.

• Brightside, which links people to therapists virtually, raised $50 million in Series B funds in March.

• Concert Health, which partners with medical groups to triage patients for mental health support, raised $42 million in Series B funds in April.
• Bicycle Health, a startup that provides virtual and in-person addiction support, raised $83 million in Series B funds in June.

What they're saying: As chatbots grow more technologically sophisticated, they could begin competing with telemental health tools including one-on-one therapy, according to investors.

• "In the long run, the question is, can AI chatbots seamlessly mimic real human interaction and relationships?" says Shivan Bhavnani, founder of the Global Institute of Mental and Brain Health Investment. "If the answer is yes, then that certainly will extend to the patient-therapist relationship as well."

Still, more research is needed to determine how well these messaging tools work, says John Torous, director of the digital psychiatry division at Beth Israel Deaconess Medical Center.

• "All of them have offered interesting pilot evidence but not strong evidence of their efficacy," Torous says.

One fun thing: The name Wysa is a play on the words "wiser" and Eliza, one of the first AI psychotherapy chatbots.

• "At the beginning I was skeptical. I was like, who would want to talk to a chatbot about their deepest darkest fears? But interest exploded," says Vempati.