Deal Dive: Amae Health is building an in-person approach to mental health care in an increasingly digital space

When Sonia García and Stas Sokolin decided to launch Amae Health to solve the problem of the healthcare system for people with serious mental illnesses, they were already well aware of the problems in the sector.

“I started thinking about this problem a long time ago,” said Sokolin, CEO of Amae. “I grew up with a sister who suffered from bipolar disorder for many, many years, and as a family we always struggled to find her care. It seemed like everything was so piecemeal and it broke our family.

Garcia also had her own experiences with the mental health system. She lost her father to suicide when she was 16, and then she and her family spent years caring for her brother who suffered from schizoaffective and bipolar disorder. Sokolin and García were introduced by mutual friends at Stanford because they were both passionate about the field. Both men knew the system could be better.

They launched Amae Health in 2022 as a new approach to helping patients with serious mental illnesses. Amae brings all resources together under one roof, including family and individual therapy, social workers, psychiatric care, and medication management. Only one physical roof, as Amae focuses on an in-person approach. The startup hired Dr. Scott Fears, who had experience with this comprehensive care approach through his work with the Los Angeles Veterans Affair Hospital, so it could iterate and improve an existing model instead of creating a new one from zero.

Amae Health just raised a $15 million Series A round led by Quiet Capital with participation from Healthier Capital, the company of former One Medical CEO Amir Dan Rubin; Index Ventures partners Baszucki Group and Mike Volpi, in addition to all of the company’s seed investors. The startup currently has a clinic in Los Angeles and plans to use the capital to expand. Its next center will be in Raleigh, North Carolina, with locations in Houston, Ohio and New York following soon after.

The funds will also be used to further develop the company’s data platform. Sokolin said the company uses AI to analyze the masses of data it collects at its clinic to find ways to continue improving care.

Over the past few years, many startups have launched to improve the mental health system, but Amae Health’s focus area and approach stands out. Most mental health startups launched during the pandemic are digital-first and focus on anxiety and depression. Amae is very different.

There’s of course nothing wrong with a series of companies focusing on anxiety and depression, and it’s good to see the founders also focusing on helping people with mental illnesses serious. Serious mental health problems affect 14.1 million people in the United States, according to the National Alliance on Mental Illness. But there is much less innovation in the sector.

This isn’t terribly surprising: solutions for people with serious mental illnesses don’t fit neatly into a traditional business model, as many telemedicine and digital solutions do. People with serious mental illness require in-person care, making solutions more expensive and slower to implement.

“When we first went to raise money, a lot of venture capitalists were like: Why are you doing this in person? Why isn’t it virtual? » said Sokoline. “The fact is you can’t virtually treat someone who has delusions or auditory hallucinations. Just like you can’t treat cancer virtually, you can’t treat this virtually.

The nature of the business also means it doesn’t immediately expand to all 50 states like some digital health startups have been able to do. García said the company was OK with this because it focused more on results than scaling.

“It’s about intentional growth and scale, not a winner-takes-all market, but really being mindful and aware of how we grow and making sure we’re generating change and lasting recovery in the lives of these individuals,” Garcia said.

Trying to scale too quickly has hurt some mental health startups. Therapeutic telemedicine platform Cerebral has been criticized for the way it advertises to potential customers and how it manages patient data in its quest for scale.

This slower growth approach can and has worked in the venture industry, said Sokolin, former VC of the Chan Zuckerberg Initiative and Health2047. One Medical, a comprehensive health care system including in-person care, is a great example. The company raised more than $500 million before being acquired by Amazon for $3.9 billion. It’s no surprise that the former CEO is currently an investor in Amae.

Sokolin and García admit that their approach has put off some potential investors. They are more focused on building a quality care system, not just how many patients they can see.

“There are way more people than anyone could ever treat,” Sokolin said of the number of people suffering from serious mental illnesses. “We’re never going to treat more than a small fraction, but we want to be the best care provider for these members. »