Mindset Health bags $17.8m in Series A to tackle depression, anxiety and chronic pain with hypnosis

A Melbourne-based digital hypnotherapy company currently helping 30,000-plus people manage irritable bowel syndrome (IBS), menopause or quit smoking has raised $17.8 million in a Series A round led by King River Capital.

Mindset Health’s raise also received backing from Tattarang’s Tenmile, Perennial Partners, Giant Leap, Alberts Impact Capital, Yard Ventures, Wordpress founder Matt Mullenweg, Linktree founders Nick Humphreys and Alex and Anthony Zaccaria, Mr Yum founders Kim Teo and Adrian Osman, and more.

The latest capital injection comes more than a year after the company secured $6.5 million in a seed round, and will be used to launch new application to address mental health problems such as anxiety and depression as well as sleep issues and chronic pain.

Founded in 2018 by brothers Alex and Chris Naoumidis, Mindset Health has developed three applications that offer therapeutic techniques to help people self-manage their health conditions: Nerva for IBS, Evia for menopause and Finito for smoking cessation.

The medtech’s biggest market is the US, accounting for 38 per cent of users, followed by Australia (19 per cent) and the United Kingdom (15 per cent).

“The global demand for our hypnotherapy programs – driven by healthcare practitioners, who recognise their effectiveness in supporting patients and recommend their use – has proven our thesis and demonstrated the deep market appetite for easy-to-use solutions that can help people manage and live well with underserved health conditions,” Mindset Health co-founder Alex Naoumidis said.

“This latest financing will support us to continue to meet that demand and in new areas with a broader product offering, as well as funding additional research programs instrumental to producing high-quality digital programs backed by clinical rigour.

“Our brains can influence our immune system, our heart health, our habits and our pain perception - our mission is to help unlock this potential of the mind to change how we think, feel and act.”

The latest funding round will also allow Mindset Health to continue its clinical research programs with Monash University as it looks to further enhance existing hypnotherapy treatments with additional features and personalisation.

Four years ago, the company partnered with gut-directed hypnotherapist and researcher Dr Simone Peters, who in 2016 published a Monash University study that found hypnotherapy can reduce symptoms of IBS by 70 per cent in patients.

Of the 78 participants surveyed, the study found there was a significant improvement in participants’ overall and individual gut symptoms (abdominal pain, bloating, wind, satisfaction with stool consistency, nausea) by the end of the six-week research period. This improvement was also maintained six-months post-treatment, suggesting that the response was not purely a placebo.

According to Mindset Health, 82 per cent of users who completed the Nerva program have successfully self-managed their symptoms.

Organic referrals from doctors, dietitians and other providers are driving significant user growth for Nerva – a trend that Mindset Health expects to continue over the next 12 months.

Other research from the Menopause: The Journal of The North American Menopause Society in 2013 determined clinical hypnosis results in “significant reductions in self-reported and physiologically measured hot flashes and hot flash scores in postmenopausal women”.

Findings published in the Complementary Therapies in Medicine also indicate that hypnosis-based therapy aids smoking cessation two times more effectively than nicotine replacement.

“By automating hypnosis-based therapies, Mindset Health is utilising the very qualities that have made traditional approaches so successful – efficient scalability, on-demand availability, and clinical rigour – without the side effects, or the billion-dollar R&D price tag,” King River Capital co-founder and partner Chris Barter said.

“It’s a total game-changer in the way it’s helping people around the world take control of their health and successfully address a range of chronic conditions naturally and holistically.”

Other investors in Mindset Health’s Series A round include George Hartley and Eriko Suzuki, SendBird founder John Kim, Tripple, Peter Cameron, James Beshara, Sandy Kory, Banana Capital, Sofie Quidenus-Wahlforss, Fifty Years and Romain Brabant.

“We’re delighted to back Alex and Chris and the Mindset Health team on their mission to empower a billion people to improve their health by unlocking the power of the mind,” Alberts Impact Ventures head of strategy Glenn Bartlett said.

“Mental health and equality are two key investment themes we focus on, and the business fits them both very well.

“The combination of proven science and digital distribution is compelling, enabling access to millions of people who would otherwise be excluded from life-changing interventions.”