Where is VR succeeding in healthcare?

Allan Gobbs is a venture investor and deep-tech entrepreneur who has taken five companies to IPO and led four M&A exits.

Gobbs’ focus is on the combination of AI, virtual reality and home-based healthcare, centering on non-pharmacological approaches to mental health.

From neurodivergent children to veterans with PTSD, Gobbs believes virtual reality is emerging as a scalable, non-drug treatment for some of healthcare’s most stubborn conditions.

What has your career investing in healthtech been like?

I have been investing exclusively in life sciences for the last 15 years. A lot has changed over that time, and I think this is probably the most challenging industry for investment.

On one hand, if you do it right, you’re rewarded because you’re supporting innovations that impact patients’ lives. On the other hand, it’s always intellectually challenging. It’s a very complicated industry that combines knowledge from many domains. Science is a huge part of it, but still only a fraction of what you need to understand.

You also need to know intellectual property, regulatory affairs, reimbursement strategies, pricing and how to build teams. It’s very different from industries like tech or climate tech.

Every year, it feels like a new industry. There are always new modalities — one year it’s gene therapy, the next RNA therapeutics or vaccines, then stem cells or something else. In oncology especially, there’s always something new becoming “hot.” Now we have the GLP-1 revolution in obesity, which affects everyone.

So it evolves very fast, and it’s super enjoyable. I’m very happy I started in this field. Seeing companies we invested in at an early stage grow over five to seven years, go public and reach multibillion-dollar valuations — while actually impacting lives — still fascinates me.

Can you tell me about the VR company you cofounded, AidXR, and what inspired it?

There’s a radical shift happening in healthcare, from hospitals to patients’ homes. I think the future environment for care will be the home.

Mental health is a major issue. We hear about a mental health crisis everywhere.

Diseases like dementia are extremely costly; globally, dementia can cost economies around $1 trillion [according to the World Health Organization]. Then there’s depression, about one in nine Americans is on antidepressants. We’re also seeing a rise in neurodivergence in children [according to the CDC].

So there’s a clear need for nonpharmacological interventions. That’s what we wanted to explore.

Personally, I love VR — the metaverse, immersive environments, interacting with people in new ways. But my cofounder had a more personal motivation: his son is neurodivergent and he experienced these challenges firsthand.

We realized VR could be a functional training platform for many mental health conditions. So we started building it, and the company has since raised funding despite a broader disappointment in VR markets.

We’re also working with leading researchers, including from the University of Southern California. There’s evidence that VR can be a delivery platform for multiple indications. In the U.S., the Department of Veterans Affairs is already using VR across dozens of conditions.

What actually happens when a child puts on the VR headset?

There are different approaches. For PTSD, for example, VR is used for exposure therapy, recreating environments to help patients process trauma.

There’s also cognitive behavioral therapy, or CBT, which usually requires a therapist and isn’t very scalable.

What we’re doing is functional training — exercises that train how the brain operates: memory, attention, stress regulation and cognitive performance.

For example, you might see objects — like the Eiffel Tower or a cube — appear briefly, then disappear. Later, you have to place them back in the correct order. This trains memory, attention and stress response as difficulty increases.

These exercises already exist in clinical settings; we’re just replicating them in VR and making them scalable. Unlike mobile apps, VR provides a controlled environment. And unlike many consumer apps, we’re validating everything through clinical trials and real-world evidence.

These methods can be applied across many conditions: depression, dementia, anxiety, substance use disorders and learning difficulties in children.

Why is VR particularly effective for these conditions?

First, as I mentioned, it’s a controlled environment. You can control emotional state, focus, cognitive load and even physical activity.

Second, there’s spatial intelligence — how we orient ourselves in space. VR activates specific neural pathways and can help restore certain brain functions. This is unique to immersive environments.

VR therapies are also now becoming reimbursable in the U.S. [85 healthcare plans across all 50 states have established rates for the reimbursement code, which includes use by autism therapy providers, according to Floreo], which is critical for scaling adoption.

Where does AI come into this?

Our understanding of mental health conditions is often too simplistic. Many are clusters of symptoms rather than single diseases.

AI allows us to personalize treatment in real time. We can track how users respond and adapt accordingly. We’re also integrating brainwave monitoring, so we can measure objective signals instead of relying on subjective questionnaires.

This enables what you might call precision psychiatry — objective, data-driven mental healthcare. That’s a major shift, and it wouldn’t be possible without AI.

How are you finding data collection for training these models?

Real-world evidence is key. Traditional clinical trials don’t always reflect how patients actually use a device at home.

We need to see real usage patterns — whether patients follow recommendations, how long they use the device and how they respond.

We’re working with partners like schools and healthcare providers to deploy VR solutions and collect data. We’re also collaborating with insurers who are interested in treating complex patients at home.

You also work with YCare, can you tell me what problem you are trying to solve?

YCare is about enabling this shift to home-based care.

The challenge isn’t technology — it’s integration. Health systems can’t manage dozens of disconnected tools and dashboards.

YCare integrates multiple solutions into a single interface, connected to existing systems like electronic health records. It also delivers devices to patients’ homes and streams data back to clinicians.

Importantly, it combines technology with real clinical infrastructure — home health services — so it can actually deliver care, not just software.

As an investor, where do you see the most success in getting solutions to market?

The key is distribution and integration — not just the technology.

Startups need access to channels that integrate into healthcare workflows. Without that, adoption is extremely difficult.

We’re also seeing a shift where data and intelligence move closer to the patient. With tools like genomics, monitoring devices and VR, we can build a complete picture of each individual.

This leads to true personalized medicine — treating each patient as a unique case, continuously adapting based on data.

What keeps you motivated?

For founders, it’s important to have a big vision — something that seems almost impossible.

Startups involve constant failure. You test, fail and try again. The question is how to stay motivated.

For me, it’s the vision. Once you have that, small problems don’t matter. You keep going because you’re building something meaningful.

In the end, everything is created by people, so it’s achievable. It may take longer than expected, but it’s possible.