Innovation in the Wake of Tragedy: Israel’s Mental Health Tech Boom
In the aftermath of the October 7, 2023, Hamas massacre, Israel is experiencing a profound mental health crisis. However, this tragedy has also sparked a wave of innovation in the mental health technology sector, with a surge of startups addressing trauma, resilience, and mental healthcare access.
Earlier this month, Startup Nation Central, in collaboration with the iCAR organization and Bezyl, released Israel’s inaugural mental health field landscape report for 2025 which maps the burgeoning ecosystem. This first-of-its-kind report highlights the technologies currently aiding individuals in coping with trauma, fortifying personal and social resilience, and enhancing access to mental healthcare. This is indicative of the nation’s proactive approach to address its immediate needs.
“Out of our deepest breaking points comes the opportunity to redefine how we train, diagnose, treat, and rehabilitate our community,” stated Dr. Alona Barnea, head of the government’s Neurotechnology Research, Science & Technology Unit. “Our unique experience with resilience allows us not only to endure but to build upon it—transforming challenges into new pathways for recovery and strength.”
Another core goal of the initiative is to foster greater coordination within the mental health space.
“We have a fragmented ecosystem,” explained iCAR Co-Founder Gila Tolub. She identified a range of stakeholders, including Israel’s health funds, government services, hospitals, NGOs, philanthropists, and tech companies, all investing in mental health. She said collaboration is essential. “They need to collaborate in a whole new way because we realize this is bigger than any of us, and the only way to move forward is by working together.”
The report indicates that 117 active tech companies in Israel are focusing on mental health, a significant increase from the 27 that were active seven years prior. Momentum has also been building since 2018, even before the October 7 attacks; however, the most significant growth in investor confidence and funding occurred last year.
Private funding rose by 66% over 2023, reaching $123 million. Tolub noted that the sector is seeing a proliferation of new companies, many of which are newly operating in Israel. Compared to the general health tech sector, where 65% of companies are in the early stages, 85% of mental health tech startups are still in the early development stages. This early-stage focus also means most of the companies are small with the majority—65%—having 10 or fewer employees.
The initiative categorizes the mental health tech sector into four key areas:
- Self-care: These tools assist individuals in managing their mental well-being. Biofeedback devices, peer-support apps, and AI-guided therapy platforms are among the options.
- Managed care platforms: These platforms digitally connect patients and therapists and include telehealth services or AI-powered tools.
- Workflow automation: These tools are designed to ease the administrative burden on clinicians, enabling them to concentrate more on therapy.
- Mental health research: This category concentrates on early diagnosis, personalized psychiatry, and machine learning tools aimed at improving diagnostic accuracy and tailoring care.
Examples of specific companies and technologies include Dugri, a platform providing structured, anonymous peer support; Kai.ai, an AI-based mental health platform; GrayMatters Health, which utilizes brain-computer interface technology; Eleos Health, an AI platform for therapy session documentation and which has raised $128 million to date; and NeuroKaire, which uses patients’ blood cells to create brain models.
Tolub shared that the concept for iCAR, or Israel Collective Action for Resilience, emerged following the war, as the fragmentation of trauma care in Israel became apparent. She emphasized a critical need to accelerate recovery efforts, with roughly 10 million people affected by trauma. iCAR’s mission is to connect NGOs, universities, philanthropists, and other players to move things forward.
“We built a scientific advisory board with various experts from universities, health funds, etc., and we asked them if they had $100 million where they would put it—and then identified eight areas that could disproportionately accelerate healing from October 7,” Tolub said. “We identified interventions with high societal returns on investment.”
Startup Nation Central highlighted significant expansion potential for Israel’s mental health ecosystem, especially in trauma care. The report also emphasized several pivotal steps required to grow the field and harness existing innovation.
“We do not have a choice. We will need technology to help all the people who need help,” Tolub said. She added that the world is looking to Israel as a case-study for mental health. She stated that, as with defense technology and cybersecurity, “necessity is the mother of innovation, and I think mental health technology is the next big thing.”
