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MedNews: Backpack Healthcare closes $14 million funding to revolutionize pediatric mental health care

The funding positions the company to increase access to and enhance its innovative app and teletherapy services for children and adolescents struggling with mental health challenges



Backpack Healthcare (formerly Youme Healthcare), an online pediatric mental healthcare provider, announced today that it has raised a $14 million Series A funding round led by PACE Healthcare Capital with participation from ECMC, Techstars, Collab Capital, Bridge Builders Collaborative, Portland Seed Fund, Hopelab, Rethink Education, Genius Guild, and Unlikely Collaborators, along with notable angel investors including Maya Ghosn Bichara and Jeffrey Walker. The pioneering health technology company, led by Founder & CEO Hafeezah Muhammad, is utilizing cutting-edge AI to transform pediatric mental health care and address the escalating youth mental health crisis, with a particular focus on medicaid-enrolled youth.

Picture of Hafeezah Muhammad and her son Azeem, captured by Jenice Waldron, Hamptons 2024


Over 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 with its AI-powered app and teletherapy services to provide indispensable support to 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.


"The funding we have raised underscores the U.S. healthcare system's need for more inclusive, tech-enabled solutions to tackle the growing pediatric mental health crisis," said Hafeezah Muhammad, Founder & CEO of Backpack Healthcare. "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."


Backpack Healthcare's AI-powered app uses advanced algorithms to monitor user emotions to match them with specialized therapists for tailored treatment plans. The app provides an engaging experience through interactive tools and activities that make therapy enjoyable, encouraging active participation. 


Additionally, Backpack Healthcare provides individual pediatric and family therapy and medication management through telemedicine, and also provides live parent training sessions on topics such as cyberbullying and substance abuse.


The capital raised in this round will be used to enhance Backpack Healthcare's technology platform, expand its reach to more communities, and further develop its teletherapy services. With current operations in Maryland and Virginia, and plans for expansion to additional states on the horizon, Backpack Healthcare is committed to making its innovative solutions accessible to a wider audience. Additionally, the company aims to continue its research and development efforts to ensure that its solutions remain at the cutting edge of AI innovation, while forging partnerships with healthcare companies, government agencies, and schools to deliver high-quality care to those in need.


"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," said Julia Monfrini Peev, Managing Partner, PACE Healthcare Capital.


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


In addition to this funding round, Robert Johnson, ESQ, Chief Equity Officer at Bezos Academy, is joining Backpack Healthcare's Board of advisors, bringing a wealth of experience as the former Chief Economic Inclusion Officer and General Counsel for YWCA Metropolitan Chicago, alongside corporate experience at McDonald's Corporation. His leadership will be instrumental in guiding Backpack Healthcare's initiatives towards greater inclusivity and equity.


About Backpack Healthcare

Backpack Healthcare is a pioneering technology company dedicated to revolutionizing pediatric mental health care. Formerly known as Youme Healthcare, the company offers an innovative app and teletherapy services designed to provide accessible, inclusive, and comprehensive mental health support for young individuals. Led by Founder & CEO Hafeezah Muhammad, Backpack Healthcare is committed to making a positive impact on the lives of children and adolescents struggling with mental health challenges. To learn more about Backpack Healthcare and its innovative solutions for pediatric mental health care, visit www.hellobackpack.com.


About PACE Healthcare Capital

Founded in 2020 and based in Chicago, IL, PACE Healthcare Capital is an early-stage venture capital firm focused on investing in companies that have developed high-impact solutions to critical healthcare challenges. With decades of combined experience and $1B+ of capital raised and deployed in healthcare, PACE applies institutional-grade investment processes to identify the best entrepreneurs and deploy financial and human capital to help them grow their business. PACE is a 100% women and/or diverse-owned investment firm.


SOURCE Backpack Healthcare


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