Israel has experienced a 150% investment increase in the mental health field during 2025, according to a recent study by Startup Nation Central, with experts seeing a correlation between the trauma left after October 7 and this rise in investment.
In total, $352 million was invested in startup funding rounds in this sector, making mental health one of the main areas of interest for investors compared to other health-related companies.
The study was developed in collaboration with the ICAR association, the 8400 organization, the Growth Directorate, and the AI-based mental health platform Bezyl.
“In fact, three out of the five highest health technology funding rounds in 2025 were from the mental health field,” the study pointed out, adding that this represented NIS 297 million out of NIS 532 million.
In total, 178 companies in the mental health field operated in Israel last year, 80% of which were startups in early development.
”It is no coincidence that specifically in this year, which was characterized by continued intense fighting on several fronts, Israel experiences growth in technologies in the mental health field,” said Adi Ostry Matalon, chief of the HealthIL Week conference.
The main problem for these companies now, said Matalon, is transitioning from their “development” focus to the implementation stage and establishing market-friendly solutions.
From general welfare to systemic solutions
According to the study, the main shift in the Israeli mental health field was from point solutions to deeper, clinical, system-based solutions using Artificial Intelligence tools.
The main companies in the mental health field are focused nowadays on developing managed care, self-care, clinical research, and workflow automation (which aims to streamline the work of the therapist and the system).
“Overall, the data points to a sharp transition from general welfare applications to systemic solutions, with an emphasis on measurement, data, clinical effectiveness proof, and the creation of a clear continuum from research through diagnosis to treatment,” the study said.
Nation-wide mental health strategy
The study also pointed out the need for a nationwide strategy to tackle the mental health crisis that is currently hitting Israel, mainly as a product of the recent wars the country has faced.
The Health Ministry established a policy to promote innovation in the sector by creating a structured implementation track within the public health system and a track for funding digital treatments.
Yariv Lotan, VP of product and data at Startup Nation Central, said the crisis will persist in Israel for years to come, requiring national investment in mental health policy to leverage digital innovation.
“Israel has become a living laboratory for the field of mental health, with an increasing need for services that provide a faster and more accurate response following the war,” Matalon added.
