Maayan Hoffman charts [1]the rapid rise of an Israeli sector few people were talking about a few years ago: mental health technology shaped by trauma. The sector is now drawing serious investment. Traumatech saw funding jump 150% in the past year, reaching $352 million, according to the Mental Health Innovation Map released at HealthIL Week.
The map now tracks 178 companies working in the space, a sharp increase from the year before. For Adi Ostry Matalon, who helped create the map and is building an impact-focused investment vehicle in the field, the story is less about quantity and more about where the money is going.
“Mental health is no longer emerging. It’s entering its next phase,” she told The Media Line.
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Fewer deals closed last year, but they were larger and more concentrated. Several standout rounds in the tens of millions signaled, in Matalon’s view, that investors are moving away from what she called “nice apps” and toward technologies that can show real clinical results inside health systems.
Among the companies drawing major backing are Syremis Therapeutics, developing medicines for mental health conditions, Empathy, which supports people through bereavement, Eleos, which uses AI to reduce the administrative load on therapists, and Sensi.AI, focused on continuous care support. They represent different approaches, but all share a move toward integration with care rather than simply providing consumer wellness tools.
Policy is beginning to align with the trend. The US Food and Drug Administration has started clearing prescription digital therapeutics for mental health, and Israel’s Health Ministry is exploring how similar tools can be incorporated into the public system. Matalon said that once hospitals and health funds begin paying for these technologies, it could significantly change how these companies grow and where they choose to stay.
“Technology is no longer just an enabler; it’s the intervention,” she said, describing Israel’s hospitals as unusually willing to test the new tools. “Israel didn’t choose to be a living lab, reality made it one.”
This report [1] is part of Traumatech, a series developed and created by Maayan Hoffman and debuting on The Media Line. The series explores how Israel is building and exporting breakthrough mental health technologies that can transform life at home and bring hope to communities worldwide.