Thirty percent. That's a figure sometimes cited for how much time therapists spend on documentation instead of direct clinical work—writing about the work rather than doing it. While the statistic appears in industry discussions, peer-reviewed validation remains elusive. Still, it's the kind of number that makes you wonder whether healthcare is a healing profession or a paperwork marathon.
Enter Klarify, which launched its AI platform on May 13 with what might charitably be called an ambitious promise: automate everything except the actual therapy. The San Francisco-based startup, backed by Y Combinator's Spring 2026 cohort, claims nearly 6,000 therapists now use its tools to generate clinical notes, file insurance claims, and prepare for sessions. Whether all those users are actually active, and whether the system lives up to its billing, is another matter entirely.
Founded in 2024 by Moody Abdul and Alexander Bergholm, Klarify bills itself as "the AI assistant every therapist deserves." Abdul's resume includes co-founding Circleback.ai (another YC company from Winter 2024) and enterprise sales experience at LinkedIn. Bergholm comes from the LLM infrastructure trenches at Workday and holds a patent in computer vision for autonomous vehicles, courtesy of research at the University of British Columbia. The four-person team works out of San Francisco but makes a point of its Canadian heritage—client data lives in a Montreal data center running on Hydro-Québec power, a detail that feels equal parts compliance strategy and brand identity.
The Mechanics of Automated Care
At its core, Klarify tackles five clinical workflows: documentation, treatment planning, insurance filing, session prep, and patient resources. Therapists can record sessions live (with client consent, naturally), dictate summaries afterward, or upload existing audio and text files. From there, the AI churns out notes in more than 20 formats—SOAP, DAP, BIRP, plus modality-specific templates for cognitive behavioral therapy, EMDR, internal family systems, emotionally focused therapy.
The insurance piece is where things get interesting, or at least more complicated. Klarify says it extracts diagnostic codes from session notes and auto-populates claim forms. The company also promises to "fight denials automatically," though precisely how that works remains unclear. No partnerships with specific payers or clearinghouses are publicly disclosed, leaving the actual integration and functionality unverified by third parties.
There's also "Klara," an in-platform AI assistant (not to be confused with the patient engagement platform of the same name from ModMed, which must make for awkward Google searches). Therapists can load past sessions into a chat interface to analyze cases, generate treatment suggestions, or create client worksheets. Klarify insists the data isn't used for training—positioning it as "a secure, compliant version of ChatGPT" for clinicians. Which is reassuring, assuming the infrastructure holds.
Recording happens across telehealth platforms like Zoom, Google Meet, Jane, and Doxy.me via browser-based audio capture. For in-person work, therapists use a computer or phone. The company supplies a consent template and instructs users to secure signed approval before hitting record. A "mind map" feature visualizes recurring themes across sessions, which sounds useful until you consider how much trust you're placing in pattern-recognition software to surface what matters.
A Big Market That Doesn't Always Pay for Software
The U.S. behavioral health market clocked in at roughly $97 billion in 2025, with outpatient counseling accounting for about 41.5% of spending, per market research from April 2026. Forecasts push that figure to $159 billion by 2035. But market size and willingness to pay for admin tools are two different animals—behavioral health has historically lagged other specialties in tech adoption, often by years.
Documentation burden hits mental health providers harder than most. A Healthcare IT Today piece from April 2026 noted that behavioral clinicians log more documentation hours than peers in other fields. A February 2026 study in Frontiers in Psychiatry explored proof-of-concept AI systems aimed at lightening that load. Included Health published preprint data in May 2025 showing 94% of clinicians reported reduced cognitive strain with an ambient scribe; 97% felt less weighed down by paperwork.
Still, the numbers Klarify presents don't quite add up. The company's public site counter, captured May 24, showed 309,121 notes generated and 2,154 therapists using the platform—a conspicuous gap from the "nearly 6,000" figure in the YC launch post eleven days prior. An older partner page from WriteUpp referenced "over 4,000 therapists" back in 2025. Whether this reflects different counting methods (registered accounts versus active users), evolving definitions, or optimistic marketing isn't entirely clear. The company hasn't released audited metrics.
Privacy Theater or Real Protection?
Klarify emphasizes compliance with HIPAA, PHIPA, PIPEDA, and Quebec Law 25. Session data is never used for training, never sold, never shared—so says the site. The terms of service, updated this spring, do allow the company to transfer personal information to service providers outside Quebec or Canada "solely for the purposes of delivering the Services." That's not unusual, but it's also not nothing. External audit certifications like SOC 2 or HITRUST don't appear on public-facing pages—the compliance claims rest on self-reporting rather than third-party verification, which may or may not matter depending on how risk-averse a practice is.
The Canadian Counselling and Psychotherapy Association lists Klarify in its member benefits program as of May 2026, offering a 20% discount with promo code CCPA20. The association's page highlights "100+ languages for transcription" and note generation in English, with options to translate into Canadian French or Spanish. Whether that language support is accurate or aspirational remains to be seen.
A Crowded, Still-Emerging Field
Klarify isn't exactly blazing a trail alone. Jane App, a Canadian practice management platform, rolled out an AI Scribe feature with built-in charting summarization from audio. Abridge added a "Behavioral Health Note" format in 2025 and keeps updating its specialty templates. Grow Therapy announced an "AI coach" with clinician oversight in April 2026. RethinkBH launched "Session Note AI" for applied behavior analysis clinicians in March 2026.
Smaller vertical players keep popping up: ConfideAI focuses on mental health templates. EMRFlow targets therapists and rehab clinicians with accelerated billing. Brivy offers transcription plus coding. The competitive landscape feels less like a race and more like a land rush—everyone staking claims, few with clear differentiation.
What Klarify offers, in theory, is breadth. Most competitors zero in on scribing or templates. Klarify bundles notes, treatment plans, insurance filing, and session prep under one subscription. Whether that bundling creates value or just complexity is an open question. Therapists are notoriously busy; whether they want one tool that does everything or best-in-class point solutions varies by practice.
The Business Model
Pricing comes in four tiers: Seed (free, 10 sessions monthly, limited AI access), Sprout ($16-19/month, 70 sessions), Bloom ($32-39/month, 130 sessions, double Sprout's AI limits), and Forest ($71-89/month, unlimited sessions, five times the AI capacity). The pricing page shows minor inconsistencies—Sprout appears as both $16 and $19 depending where you look, likely due to currency toggles or monthly versus annual billing displays. All plans include access to at least 19 note types, custom templates, and multi-language support.
The advisory roster includes Ingrid Sochting, clinical professor and director of the UBC Psychology Clinic; Shuo Chen, a commissioner on the California Commission for Behavioral Health; and Michael Towers, a psychotherapist and University of Guelph professor. Abdul also hosts the "Future of Therapy Podcast," which aired an episode on May 8, 2026. Dealroom.co lists a March 2026 seed entry from Y Combinator for $125,000, though that figure may simply reflect YC's standard deal rather than total capital raised.
The Open Question
Admin automation for clinicians feels overdue. It also feels unproven at scale, particularly in a field as intimate and high-stakes as therapy. Klarify is betting that therapists want a single AI agent handling the grunt work rather than stitching together multiple point solutions. Early user numbers suggest some traction—though the ambiguity around how many of those users are truly active is worth noting.
Whether that translates into retention, meaningful revenue, and an actual dent in the documentation crisis depends on accuracy, compliance, and something harder to measure: trust. Can therapists rely on an AI to speak for them to insurance companies? Will it capture the nuance of a session without flattening the complexity? And will it hold up under the scrutiny that inevitably comes when mental health data is involved?
For now, Klarify is one more entrant in a space that's heating up fast. The question isn't whether AI will reshape therapy documentation—it almost certainly will. The question is whether this particular iteration gets it right, or just close enough to matter.
