Study of 542 failed mental health startups reveals seven recurring failure patterns

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A new analysis examined 542 digital mental health companies that exited the market between 2000 and 2026, coding each on up to 18 fields including business model, funding, clinical evidence, and reason for closure. The research was prompted by high-profile failures like Pear Therapeutics, which collapsed in 2023 despite FDA clearance because no health plan agreed to reimburse its product, having once been valued at $1.6 billion. Data was drawn from sources including Crunchbase, CB Insights, and trade press, with every company verified against at least two independent sources. Around 58% of the companies in the sample are from the United States, meaning the findings most accurately reflect the English-speaking digital health market. The study was conducted by the founders of Mentalium, a voice-based CBT diary app, who undertook the research before committing further resources to the mental health technology space.

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