Key Takeaways
- From August 2020 through February 2021 the percentage of adults with recent symptoms of an anxiety or depressive disorder increased 6%, from 36% to 42%.
- For every dollar invested in scaled-up treatment for common mental disorders, there is a $4 return in improved health and productivity.
- In 2020, investors poured $1.4 billion into the market, which this year has already been exceeded, with $1.8 billion invested as of Q2 2021.
It has been 18 months since COVID-19 was declared a pandemic. Stay-at-home orders were in place for months, which meant no going to the office, attending family get-togethers or socializing with friends. As the pandemic persists, anxiety and depression rates in the United States are at historic highs, and the line between work and life continues to blur for many as the home has become our workplace and our classroom.
Last year, I wrote about how this unprecedented period of confinement tested the resilience of entrepreneurs. According to the Centers for Disease Control and Prevention, from August 2020 through February 2021 the percentage of adults with recent symptoms of an anxiety or depressive disorder increased from 36% to 42%. In recognition of World Mental Health Day on October 10, I want to revisit the state of mental health and the innovation companies providing services to those in need.
Positive developments
One of the most encouraging developments I have observed since last year is the increased focus on the importance of mental health. More high-profile public figures have been speaking out about mental health conditions than ever before. For example, athletes Simone Biles and Naomi Osaka used their platforms to promote awareness about their personal mental health issues and are setting examples by allowing themselves to take a break by stepping away from their respective sports.
Awareness and normalization of mental health have been supercharged by social media platforms, especially ones with a younger audience. Take the #MentalHealth hashtag on TikTok videos and Instagram posts, racking up 11 billion views and 30 million public Instagram posts, respectively. According to a 2020 APA study, the stress levels of Gen Z adults—those ages 18 to 23—rose nearly 10% since 2017 and are higher than those of any other generation.
Mental health knows no bounds. Nationwide, almost one in five people—47.1 million—is living with a mental health condition. That number increased by about 1.5 million from 2020 to 2021. As remote work blurs the line between work and life, so has the responsibility for people’s mental health. In a short time, mental health awareness has gone from being rarely mentioned in the workplace to a core HR principle. Fostering an environment in which employees feel comfortable discussing mental health issues and supporting one another has never been more important. I encourage leaders, individuals and teams to reflect on how they can help and share best practices. This is a team game that we can only win together.
Many companies have launched initiatives to support employee mental health: flexible work schedules, meditation, wellness programs and designated no-work periods. Take Bumble, Hootsuite and Nike, to name just a few that have given their employees an entire week off to destress, recoup and spend time with friends and family. And there is good reason: mental health issues are costly, resulting in absenteeism, lost productivity, increased medical costs and low morale. Per the World Health Organization, for every dollar invested in scaled-up treatment for common mental disorders, there is a $4 return in improved health and productivity. That’s significant for both the employees and the business.
Venture investment in mental health companies reaches $1 billion1
VC-backed health technology companies whose primary focus is mental health. Source: PitchBook.
The mental health landscape is changing. Now people can access support outside of therapy rooms and doctor officers —on their smartphones—and choose custom treatment plans. Much of this has been driven by the innovation economy. In 2020, investors poured $1.4 billion into the market, which has already been exceeded this year, with $1.8 billion invested as of the second quarter of 2021. 2021 also had more deals over $100 million than 2017 through 2020 combined, including Lyra Health, which raised a combined $390 million. This is all great news is for the consumer as it will increase access and improve offerings.
2021 venture investment into mental health startups has already surpassed all of 20202
Platform defined as companies that target a combination of mental and behavioral health conditions—such as anger, anxiety, attention-deficit/hyperactivity disorder, bipolar disorder, depression, eating disorders, obsessive-compulsive disorder, posttraumatic stress disorder, schizophrenia, sleep, stress and substance use—and may also include mindfulness and overall well-being practices.
The mental health landscape has historically been dominated by platform companies that target a combination of mental and behavioral health conditions. However, a trend is emerging where companies are specializing, meaning they are focusing on a single indication. This is a positive development as it will give individuals more choice over their method of treatment. Companies successfully employing this approach include Brightline (behavioral health solutions for kids), Sprout (in-home autism care) and Akili Interactive (video game treatment for different disorders).
Notable private mental health companies
Name |
Headquarters |
Description of product or service |
|
|
New York, NY |
Personalized eight-week virtual behavioral change programs |
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Boston, MA |
Self-directed video games to improve cognitive performance in kids, cleared by the US Food and Drug Administration |
|
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San Francisco, CA |
Digital healthcare portal offering personalized behavioral programs and access to medical professionals |
|
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Palo Alto, CA |
Operator of a healthcare platform intended to transform behavioral health care for kids, teens and their families |
|
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San Francisco, CA |
Sleep, meditation and relaxation smartphone application designed to reduce anxiety and improve sleep |
|
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Walnut, CA |
Provider of online emotional health services intended to help patients with depression, anxiety and insomnia |
|
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New York, NY |
Personalized software-as-prescription medical treatments for smoking cessation, depression and more |
|
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San Francisco, CA |
Mental health and emotional fitness therapy classes |
|
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New York, NY |
Smartphone application that offers programs and games intended to push users toward healthier mindsets |
|
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Los Angeles, CA |
Smartphone application designed to teach meditation and mindfulness |
|
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New York, NY |
Operates a virtual network of therapists |
|
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Cambridge, UK |
Virtual cognitive behavioral therapy for patients and real-time clinical decision support for therapists and providers to reduce variation in treatment |
|
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Burlingame, CA |
Telehealth or in-person care delivered by a curated network of licensed therapists and coaches |
|
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Mountain View, CA |
Biomarker panel that measures brain function, allowing clinicians to conduct evidence-based interventions and offer personalized therapy |
|
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San Francisco, CA |
Mental health platform provider intended to help companies manage their employee health benefits |
|
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New York, NY |
Personalized one-on-one virtual therapy intended to transform emotional well-being |
|
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Boston, MA |
Software-based digital therapeutics combining digital interventions with drugs to enhance efficacy |
|
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Chicago, IL |
Telepsychiatry services that integrate into existing workflows and processes |
|
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San Francisco, CA |
Five-minute meditation app designed to improve overall well-being |
|
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New York, NY |
Provider of a personalize mental health platform for employee well-being |
|
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New York, NY |
Healthcare technology and services intended to bring together physicians, mental health providers and insurance companies to improve patients’ health and drive down costs |
Spurring the industry are some notable mergers & acquisitions. Headspace’s $3 billion acquisition of Ginger is the first megamerger (deal size >$1 billion) in the mental health space. The COVID-19 pandemic increased corporate wellness initiatives, which intensified competition for mental health program offerings to employees. This, plus companies’ increasing focus on a single indication, is intensifying competition for certain users, which gives me reason to expect more consolidation will occur. In the end this consolidation will be good for the individual as the best providers will partner with other specialists to provide a suite of services.
Mental health companies have also been getting in on the SPAC, or special purpose acquisition company, trend. Since the Hims & Hers de-SPAC in January 2021, SPACs have proven to be a viable alternative to an initial public offering (IPO) or traditional M&A for venture-backed HealthTech companies. The first mental health de-SPAC was Canada-based company Highmark Interactive (3/3/2021), followed by Pear Therapeutics (6/22/2021, $276M),3 Talkspace (6/23/2021, $414M) and CareSpan (8/4/2021).3
Notable mental health company exit activity3
The CareSpan de-SPAC was announced on 8/4/2021. The deal has not yet been completed.
At SVB, we have partnered with Coa to launch an emotionally fit leadership program for startup founders, with the goal of helping them better navigate the challenges of leading through uncertainty and mitigating the impact of COVID-19 on mental health. If you are a founder interested in learning more about emotional fitness classes and 1:1 therapy, check out Coa.
It brings me great pleasure to see the developments of the past 12 months and the many positive steps individuals and companies have taken. I’m personally encouraged by the entrepreneurs leading these companies and the way they’ve been able to step up to the challenge in this environment. We are proud to support this community of visionaries, and we look forward to helping mental health–focused companies and entrepreneurs continue to grow and flourish as they break barriers and taboos and further address this important societal need.
The prevalence of mental health issues means we all likely know someone who is struggling. If you or someone you know is suffering from a mental health condition, please seek assistance from a medical professional.