AI Mental Health Tools Spark Investment Boom

Investors are pouring money into startups developing artificial intelligence (AI) for mental health care, betting on technology to boost efficiency and profits in the rapidly growing sector.

Yung Sidekick, a Miami-based company creating an AI platform for mental health professionals, recently secured $825,000 in pre-seed funding. The deal exemplifies a larger trend of health tech firms leveraging AI to streamline operations, potentially reduce costs, and scale services in an industry struggling to meet surging demand.

“One of the biggest innovations driving the growth of AI mental health software is the advancement in voice technology,” Kathleen Perley, GenAI professor at the Jones Graduate School of Business (Rice Business) at Rice University, told PYMNTS. “Not only do these AI systems sound more human, but they are also becoming better at having natural conversations — asking questions, listening and responding effectively.”

This focus on automation addresses a big issue in the field. According to the American Psychological Association, 45% of psychologists report burnout, with administrative tasks contributing significantly to their workload. By streamlining these processes, Yung Sidekick and similar AI tools could alleviate therapist burnout and improve patient care.

“Our goal is to empower mental health professionals by cutting down on paperwork, allowing them to spend more time with their patients,” said Yung Sidekick Co-Founder Stanley Efrem in a news release. The platform uses AI to automate administrative tasks, including generating electronic health record (EHR) progress notes in just two minutes.

Mental Health Care With AI

Recent technological improvements allow AI to provide more nuanced and effective responses. Perley said, “Tools like Hume AI take a scientific approach to analyzing speech to understand emotions and incorporate a multimodal approach, which includes body language analysis. This means that AI can interpret not only what a person says but also vocal cues and physical gestures tied to their emotions or current experience.”

The pandemic has also played a role in accelerating the adoption of AI in mental health care. Perley pointed out, “Another major driver is the extension of legislation after COVID-19, which allows mental health providers to treat patients virtually, sometimes even across state lines. This has made mental health services more accessible, driving the growth of AI-powered mental health tools.”

Yung Sidekick’s platform capitalizes on these advancements. It captures session audio, automatically generates a transcript, and uses AI to extract key details, including symptoms, medications and treatment goals. The startup is also rolling out an AI assistant feature designed to support therapists with instant access to session-specific details and client history.

Addressing the Mental Health Crisis

The investment boom in AI mental health tools comes at a time of increasing need. “We’re seeing an increase in anxiety levels, with a recent study finding that 43% of adults feel anxious today. Globally, 1 in 8 adults is living with a mental health condition,” Perley said.

However, she argued that the surge in investment isn’t solely due to increased mental health issues: “There is greater awareness and acceptance of mental health concerns. AI provides a unique opportunity to create spaces where people can feel psychologically safe, allowing them to be vulnerable without fear of judgment.”

Diverse Approaches in AI Mental Health

The AI-powered mental health solutions field is rapidly expanding, with startups tackling various aspects of care delivery and support.

O7 Therapy from Egypt is developing an AI-driven platform that matches patients with the most suitable therapists based on their specific needs and preferences. This approach aims to improve treatment outcomes by ensuring a good fit between patient and provider.

France’s Callyope is building speech-based foundational models to analyze patient behaviors and monitor symptoms across various mental health conditions. By providing clinicians with insights on treatment efficacy or potential relapse, Callyope aims to enhance the precision of mental health care.

HearMe, a Polish startup, uses AI-powered chatbots to provide immediate support and resources to individuals experiencing mental health distress. By offering 24/7 availability and personalized guidance, HearMe aims to reduce barriers to accessing help and improve early intervention.

Thalia Psychotherapy from Kenya is developing AI-powered tools to assist therapists in analyzing patient conversations and identifying potential mental health concerns. This technology helps therapists provide more personalized and data-driven care.

Balancing AI and Human Touch

Despite the enthusiasm for AI in mental health care, experts caution against viewing it as a replacement for human therapists. “It’s important to view AI in mental health as an augmentation or support mechanism rather than a replacement,” Perley said. “Leveraging AI to create personalized treatment plans, for instance, based on cognitive behavioral therapy (CBT), has been shown to improve adherence rates by up to 60%.”

Yung Sidekick’s approach aligns with this perspective. The platform is designed to supplement in-person therapy by providing detailed session reports, offering insights for therapists and patients, helping track therapeutic progress, and identifying patterns over time.

“We’re also working toward a provider-patient platform that integrates patient-focused features, such as AI-driven client chat, to enhance the therapy experience for everyone involved,” said Michael Reider, CEO and Co-Founder of Yung Sidekick.

As the field evolves, startups like Yung Sidekick focus on building trust and maintaining the human element in therapy. Perley, who advises a mental health AI startup, stressed the importance of this approach: “This startup is focusing first and foremost on creating a community and personal connection before bringing in AI. They are listening to their target audience and prioritizing the challenges that need to be solved.”

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.