The global mental health industry is experiencing major shifts as we approach the end of 2025. The wellness market as a whole is now estimated at 6 point 8 trillion dollars, having grown 35 percent since 2019, with mental health increasingly seen as a central pillar within this sector. In the past week, sector headlines have focused on expanding partnerships, rapid fundraising, the role of artificial intelligence, consumer affordability, and emerging regulatory changes.

Among the largest deals, Function Health raised 298 million dollars to expand its AI-powered medical intelligence model, and FamilyWell Health, a women’s mental health startup, secured 8 million dollars as part of a broader wave of investment in digital and specialized mental health services. Healthtech startups focused on AI captured nearly four billion dollars of the 6 point 4 billion dollars raised in healthcare venture capital for the first half of 2025. Investors are returning to mental health tech, with deal volume up 12 percent in the last quarter compared to the previous quarter.

Major industry players are prioritizing community-level engagement and workforce expansion. Manulife’s deal with Mind Hong Kong is funding public education and free psychological support programs, responding to survey data that nearly half of Hong Kong residents now report symptoms of anxiety or depression. Their move reflects a larger trend for insurers and employers to address mental health crisis through workplace and community initiatives, aiming to reduce stigma and improve early intervention.

At the policy level, the US Centers for Medicare and Medicaid Services announced a 2 point 6 percent increase in hospital outpatient payment rates for 2026, which could affect reimbursement for mental health services. In Australia’s Capital Territory, a new government framework was released to guide strategic investment in community-based mental health care last week, signaling a shift towards more localized and preventive services.

Supply and workforce remain ongoing concerns. There is accelerated hiring of advanced practice providers to meet surging outpatient demand, and regulatory moves in both the US and Europe are seeking to address workforce shortages and quality standards for AI-driven therapy tools.

Price and affordability remain major barriers: US surveys show health service costs rose more than 25 percent above 2020 levels, prompting insurers and employers to raise premiums or narrow choices for covered mental health benefits. While access and innovation are expanding, the industry faces tightening consumer budgets and increased regulatory scrutiny.

Compared to last quarter, there is more optimism in investment but also more skepticism about the effectiveness of new AI products. Leading organizations are focusing on outcome measurement and integration of mental health into broader health and ESG strategies to better weather economic and social uncertainty.

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This content was created in partnership and with the help of Artificial Intelligence AI