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Exclusive: Backpack Healthcare bags $14M for children's mental health

Illustration of children facing away with backpacks holding hands with a grid background and circles

Illustration: Eniola Odetunde/Axios

Backpack Healthcare, an online pediatric-focused mental health care provider, raised a $14 million Series A round, CEO Hafeezah Muhammad tells Axios exclusively.

Why it matters: Half of all lifetime cases of mental disorders begin by age 14 and, for about 1 in 4 adolescents, they result in severe impairment.

Zoom in: PACE Healthcare Capital led the round with participation from Techstars, Collab Capital, Bridge Builders Collaborative, Portland Seed Fund, Hopelab, Rethink Education, Genius Guild, ECMC and Unlikely Collaborators.

How it works: The Maryland company provides help for people ages 4 through 26, working with social services departments to match patients and help them access appointments in under five days.

  • The company aims to serve Medicaid patients, a population that has historically had difficulty accessing mental health services.
  • Backpack also offers a self-care app, which lets patients check in and say how they are feeling, as well as bibliotherapy.
  • The company is generating revenue, Muhammad said, although she declined to disclose exact numbers.

What's next: With the fresh capital, Backpack will expand beyond Maryland and Virginia.

  • "We will expand carefully, ensuring that we can maintain quality within the state and we will base it off the Medicaid percentage of kids within those states," Muhammad says.
  • Backpack is taking a lean approach on future fundraising and hopes to get to profitability without needing additional capital, she adds.
  • "You don't want to have to rely on venture capital to sustain your operations," she adds.

The big picture: Antidepressant prescribing to youths rose 63.5% during the pandemic — further evidence of a youth mental health crisis characterized by depression and anxiety.

State of play: Several startups focused on family support, children's mental health and overall wellness have drawn venture dollars in recent years.

  • Pediatric telehealth messaging startup Summer Health raised an $11.65 million Series A last month.
  • Pediatric telemental health company InStride Health in March secured an unlabeled $30 million.
  • Coral Care in January collected a $1.3 million pre-seed to more easily connect parents to in-network childhood development specialists.
  • Flourish Labs, a San Francisco-based telehealth and training peer support platform for mental health, raised $6.6 million in seed funding last October.

ğŸŽ’ 1 cool thing: The company's name alludes to the "emotional backpack" young people are carrying, Muhammad tells Axios.

  • "Our goal is to help our kids and families lighten the load," she says. "We put tools in and we take out stressors."
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