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

When Sonia García and Stas Sokolin decided to launch Amae Health to solve the broken care system for people with severe mental illness, they were already intimately familiar with the industry’s issues.

“I started thinking about this problem a very long time ago,” said Sokolin, Amae’s CEO. “I grew up with a sister who had 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 apart.”

Garcia had her own experiences with the mental healthcare system, too. She lost her father to suicide when she was 16 years old, and then she and her family spent years as caregivers for her brother with schizoaffective and bipolar disorder. Sokolin and García were introduced by mutual friends at Stanford because they were both passionate about this area. The pair knew the system could be better.

They launched Amae Health in 2022 to be a new approach to helping patients with severe mental illness. Amae brings resources — including family and individual therapy, social workers, psychiatric care and medicine management — all under one roof. One physical roof, that is, as Amae is focused on an in-person approach. The startup hired Dr. Scott Fears, who had experience with this all-encompassing care approach through his work with the Los Angeles Veterans Affair Hospital, so they could iterate on and improve an existing model as opposed to starting a new one from scratch.

Amae Health just raised a $15 million Series A round led by Quiet Capital with participation from Healthier Capital, former One Medical CEO Amir Dan Rubin’s firm; Baszucki Group and Index Ventures partner Mike Volpi, in addition to all of the company’s seed investors. The startup currently has one 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 to follow shortly after.

The funds will also be used to continue building out the company’s data platform. Sokolin said the company is using AI to go through the troves of data it collects at its clinic to find ways they can continue to improve care.

Over the past few years, many startups have launched to improve the mental healthcare system, but Amae Health’s focus area and approach stand out. Most of the mental health startups that launched in the pandemic are digital first and focused on anxiety and depression. Amae looks very different.

There’s nothing wrong, of course, with having a slate of companies focused on anxiety and depression, and it’s good to see founders focused on helping people with severe mental illness, too. Severe mental health problems affect 14.1 million people in the U.S., according to the National Alliance on Mental Illness. But there’s a lot less innovation in the sector.

That’s not too surprising: Solutions for people with severe mental illness don’t perfectly fit a traditional venture model in the way many telemedicine and digital solutions do. People with severe mental illness need care that is in person, making solutions more costly and slower to scale.

“When we first went out to raise money, a lot of venture investors were asking, why are you doing this in person? Why is this not virtual?” Sokolin said. “The fact of the matter is you can’t treat someone who is having delusions or auditory hallucinations virtually. The same way you can’t treat cancer virtually, you can’t treat this virtually.”

The nature of the business also means that they aren’t expanding to all 50 states right away as some digital health startups have been able to. García said the company is fine with that because it’s more focused on the outcomes than the scaling.

“That is about intentional growth and scale, not the winner-take-all market, but really being considerate and conscious about how we do grow and ensuring we are generating lasting change and recovery in these individuals’ lives,” Garcia said.

Trying to scale too fast has hurt some mental health startups. Therapy telemedicine platform Cerebral has come under fire for how it advertises to potential customers and how it handles patient data in its pursuit of scale.

This slower growth approach can and has worked in venture before, said Sokolin, a former VC at both the Chan Zuckerberg Initiative and Health2047. One Medical, a full-service healthcare system, including in-person care, is a prime example. The company raised more than $500 million before getting scooped up by Amazon for $3.9 billion. It’s not surprising the former CEO is a current investor in Amae.

Sokolin and García are fine with the fact that their approach has turned off some potential investors. They are focused more on building a system for quality care, not just how many patients they can see.

“There are way more individuals than anyone could ever treat,” Sokolin said about the scope of individuals with severe mental illness. “We are never going to treat anything more than a small fraction, but we want to be the best-in-class provider for those members.”