Backpack, an AI-powered company that provides virtual mental health care to children, has raised $14 million in Series A funding.

“The funding we have raised underscores the US healthcare system’s need for more inclusive, tech-enabled solutions to tackle the growing pediatric mental health crisis,” CEO Hafeezah Muhammad said. “This milestone will help us deliver on our commitment to breaking down barriers and ensuring equitable access to mental health support for all children, regardless of their socioeconomic status.”

Pace Healthcare Capital led the funding round, which included Techstars, Collab Capital, Bridge Builders Collaborative, Portland Seed Fund, Hopelab, Rethink Education, Genius Guild, ECMC, and Unlikely Collaborators. 

Robert Johnson, Jeff Bezos’s chief equity officer, founded the Montessori school network Bezos Academy and will join the Backpack Healthcare Board of Advisors as part of the deal.

“Investing in pediatric mental health is a truly unique opportunity: it is not just about driving returns; it is about nurturing brighter futures for millions of underserved children and investing in the resilience of our society tomorrow. We could not be more thrilled to lead Backpack Healthcare’s Series A,” Julia Monfrini Peev, Managing Partner, PACE Healthcare Capital, said. 

“We have so much conviction in Hafeezah Muhammad as a CEO; no team is better suited to deliver quality, accessible, culturally competent mental health services for children like Backpack Healthcare.”

Backpack is part of a wave of startups and hospitals trying to address a national mental health crisis. More than 40 million children in the U.S. rely on Medicaid or CHIP for healthcare coverage. Yet, only 14% of mental health clinicians accept Medicaid as insurance, highlighting the urgent need for accessible solutions. 

In response to this pressing issue, Backpack Healthcare is developing innovative and inclusive solutions, including an AI-powered app and teletherapy services, to support all young individuals navigating mental health challenges. 

The company strategically works with insurance providers that accept Medicaid, bridging the gap between the limited number of Medicaid-accepting providers and those in need. Backpack provides telehealth therapy to children and an artificial intelligence platform to help therapists plan visits. 

The firm uses generative AI software to help save therapists time in an attempt to reduce medical professional burnout. Muhammad said one of Backpack’s tools can help a physician create a treatment plan in 10 minutes, compared to the standard 45 minutes. The Maryland and Virginia company also uses algorithms to help match patients with clinicians who can meet their needs.

The startup’s ability to blend AI and health care is one of the reasons the federal government selected Backpack in February to join technology luminaries like Google and Meta as part of the U.S. AI Safety Institute Consortium. The firm will help develop federal guidelines for everything from detecting flaws in AI systems to ensuring secure personal data.

The investment is one of the largest venture capital rounds in Maryland raised by a Black founder. The additional capital will help Backpack improve its mobile application by adding more content in languages other than English. It will also prepare the startup for a launch in new states in the Midwest and East Coast.