At Term Sheet, we typically report on investments in companies: venture capital, private equity, hedge funds, etc. But in today's newsletter, we're looking at a different kind of funding with an entirely different value proposition: investment in communities and the mental health of the young people who live there.
A third of 18- to 25-year-olds in the U.S. are living with a mental illness, according to a 2022 report from a U.S. government agency that oversees mental health treatment services. Data shows that one in 10 young people in that age group experience a serious mental illness, which means it causes significant disruption to their daily lives.
Although mental health has become more mainstream in recent years, minority communities face additional barriers to receiving appropriate care. Researchers have found, for example, that stigma around mental health is worse for minorities. Studies have shown that Black people with mental and substance use disorders have longer wait times than white patients and are at higher risk of financial hardship if they become depressed. And compared to the demographics of the U.S. population, there are disproportionately fewer psychology professionals from minority backgrounds.
Social media platform Pinterest, in collaboration with Paramount Entertainment's entertainment network Showtime and MTV Entertainment Group, has committed $1 million in funding to community organizations working on culture-based mental health initiatives for young people, the companies told Fortune exclusively.
So what exactly are culturally informed mental health practices? The definition is vague, but it can include food, dance, music, meditation, yoga, comedy, and other activities rooted in cultural traditions that promote healing. Called the Hidden Healers Fund, the fund also aims to support organizations that bridge gaps in access to mental health care for minority communities, like the AAKOMA Project, a nonprofit that provides free therapy sessions to members of marginalized groups.
“We felt this was a really new, novel initiative worth investing in,” Erica Soto Lam, MTV's vice president of social impact strategy, told Fortune. “Even if people have access to mental health care, the disparity in therapists from communities of color makes it difficult for them to get care from someone with experience.”
Malik Ducard, chief content officer at Pinterest, cited his industry as a reason for the demand for mental health care. The negative impact of social media on mental health has become more clear in recent years, with the Surgeon General issuing a warning to social media companies on the issue last year. Meanwhile, Pinterest supports emotional wellness initiatives and is committed to developing healthier products for young people, Ducard said in an emailed statement.
The fund didn't come out of nowhere. In 2022, MTV hosted a forum at the White House focused on mental health. Thirty health leaders under the age of 30 attended and pitched ideas for resources needed for young people to officials from media companies, nonprofits, and the Biden-Harris administration. Four of the participants, Mahmoud Khedr, Ayanna Kelly, Maddox Guerrilla, and Kayla Beccajah, proposed diverse healing modalities and called themselves “secret healers.”
“We were always determined to do more with at least one idea,” MTV's Soto Lam said, “and this idea caught our eye from the beginning.”
A few days after the event, MTV partnered with the Hidden Healers group. Together, they created an online resource page for members of underrepresented communities. The new fund built on this previous effort, bearing the original group's name.
While the $1 million fund is a step in the right direction, it's still a drop in the bucket compared to the deep pockets of these media companies and the scale of the problem: Paramount made $30 billion in revenue last year, and Pinterest raised $3 billion.
Soto Lam declined to say how many organisations the Hidden Healers Fund plans to invest in, or whether the media companies will continue to pump money into projects beyond the first year, but she said “if we do something that works, we will continue to do it.”
Young people are the future of business (and politics, academia, science, journalism, and everything else), so investing in improving their mental health is perhaps the only investment that matters.
Rasill Jones
Twitter: @RachylJones
Email: rachyl.jones@fortune.com
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Joe Abrams curated the Deals section of today's newsletter.
Venture Transactions
– Relay, a business banking and money management platform based in Toronto, Canada and New York City, raised $32.2 million in Series B funding. The round was led by Bain Capital Ventures, with participation from Industry Ventures and existing investors BTV, Garage and Tapestry.
– Tel Aviv, Israel and Foster City, California-based Firefly, a platform for multi-cloud operations management, raised $23 million in Series A funding. The round was led by Vertex, with participation from Hanaco, SoftBank, InMotion Ventures and Redseed.
– Maven AGI, a Boston, Massachusetts-based company developing generative AI designed for customer support, raised $20 million in Series A funding. The round was led by M13, with participation from Lux Capital, E14 Fund and others.
– Odyssey , a New York City-based platform that partners with states to run school choice programs for parents, raised $10 million in Series A funding. The round was led by Bradley Tusk of Tusk Venture Partners, with participation from Andreessen Horowitz, Cubit Capital and Bling Capital.
– Everfence, a Newport Beach, Calif.-based platform that connects homeowners with contractors for fencing work, raised $7 million in Series A funding led by HIPstr, the investment arm of HighPost Capital.
– SCRYPT, a Zurich, Switzerland-based cryptocurrency financial services provider, raised $5 million in funding. The round was led by Braza Bank, with participation from Funfair Ventures, Cabrit Capital, and Atlantic Labs.
– Limassol, Cyprus-based game studio Juicy Button Games has raised $3 million in seed funding. The round was led by Games Fund, with participation from TGF and Anton Sinelnikov.
Unlisted stocks
– GTCR has agreed to take Surmodics (NASDAQ: SRDX), an Eden Prairie, Minnesota-based developer of medical devices and in vitro diagnostic technologies, private for approximately $627 million.
– Hudson Glade Inc. has acquired Quality First Home Improvement, a Sacramento, Calif.-based home services provider. Financial terms were not disclosed.
– JENNMAR, a portfolio company of FalconPoint Partners, has acquired a majority stake in Australian Steel & Wire, a Henderson, Australia-based manufacturer of wire mesh and related products. Financial terms were not disclosed.
– Dominus Capital acquired a majority stake in Scottsdale, Ariz.-based Safe Haven Defense, a maker of bulletproof window film. Financial terms were not disclosed.
– Paine Schwartz Partners-backed Suja Life has acquired Newtown, Pa.-based soda brand Slice. Financial terms were not disclosed.
end
– Merck (NYSE: MRK) has agreed to acquire London, UK-based iBio, a developer of medicines for eye diseases, from Jeit Capital for up to $3 billion.
– Bridgepoint Group has acquired a majority stake in LumApps, an intranet provider based in Tassin, France, from Goldman Sachs Alternatives, Eurazeo Growth, Bpifrance and IRIS for $650 million.
Initial public offering
– Gauzy, a Tel Aviv, Israel-based developer of smart glass, camera monitors and advanced driver assistance technology, plans to raise up to $79.8 million by issuing 4.2 million shares at a price of $17 to $19 per share. The company posted revenue of $78 million for the year ending Dec. 31, 2023. Ibex Partners, Olive Tree Ventures, Infinity Holding Ventures PTE, Avery Dennison Corp, South Lake One and Blue-Red Partners are backing the company.
people
– Bessemer Venture Partners, a San Francisco-based venture capital firm, promoted Lindsay Lee to vice president.
– Silas Capital, a New York City-based growth equity and venture capital firm, has hired Mary Murtagh as vice president on its investment team, who previously worked at CAVU Consumer Partners.
– MS&AD Transverse has hired Matthew Jones, formerly of Anthemis Group, as head of Transverse Ventures, the company's New York City-based venture and private equity investment arm.
