It’s RU OK Day – and startups and VCs are leading the way in finding solutions for better mental health

Today, September 9, is RU OK Day. 

R U OK? inspire and empower everyone to meaningfully connect with the  people around them and start a conversation with those in their world who may be struggling with life. You don’t need to be an expert to reach out – just a good friend and a great listener. 

The four steps in a conversation that could change a life are:

1. Ask R U OK? 2. Listen 3. Encourage action 4. Check in

You can learn more here.

Meanwhile, the startup sector is also lending a hand and investors are backing their ideas.

This guest post from Antler’s Anthony Millet examines how the startup sector has responded too, with growing support from investors.

Mental health awareness, virtual solutions, and VC investment have been on the increase the past few years, accompanied by a decreasing, albeit omnipresent, stigma around mental health.

The COVID pandemic, however, truly brought mental health into the spotlight with record levels of anxiety and depression – increasing from 11% of adults in 2019 to 42% in 2020 – resulting from social distancing measures and the fears around COVID.

This led to a sharp increase of VC funding for mental health apps, with 54% quarter-on-quarter growth from Q1 2019 to Q2 2021 to a total of US$ 2.3 billion and 252 deals over the last year globally.

While there has been some speculation that we are in the midst of a mental health funding bubble, one could argue that there is still a great deal of both innovation and growth potential in this sector.

Firstly, this is a huge market that has been largely overlooked; the market penetration is low and the market is immature in comparison to other healthcare areas in terms of access, insurance coverage, and digitalisation of the therapist and patient journeys.

Secondly, there is huge growth potential; the World Health Organisation projects that by 2030, mental health conditions will be the leading cause of mortality and morbidity globally, yet mental health solutions severely lag, with only 2% of VC healthcare investment allocated to mental health and under 5% of governments’ total health spending.

 

Few solutions were previously designed with therapists

Mental health solutions are well positioned for digitalisation, and offline solutions can easily be repurposed by alternative telehealth solutions.

However, few of the telehealth solutions created for the broader healthcare system thus far were designed with therapists in mind and hence haven’t fully addressed the needs of mental health providers nor patients.

This has created opportunities for telehealth specialists to enter the market, such as Talkspace, the largest provider of teletherapy in the U.S, which went public earlier this year, but also tools for therapists such as Australian-based Flintworks, which uses virtual reality to support PTSD treatment or Clarigent Health, also in the U.S, which leverages AI to support clinicians in their diagnostics and treatment decisions.

Access is among the key challenges

Expanding access to mental health treatments is one of the key challenges of this sector. It is estimated that only 30 to 50% of people experiencing mental illness get treatment, mainly due to a lack of mental health professionals, financial resources, or the associated stigma. Early-stage companies have emerged to tackle this problem, including a number of Antler-backed companies such as: Kalda, which facilitates  peer-to-peer support and group therapy in the LGBTQIA+ community, or VoiceHER, which is a voice-based community for women.

Others, such as Blueheart – the digital sex therapy platform, and Arli – the platform for people with additiction to get better access to support, aim to break down stigmas.

 

Mental health is about more than treating illnesses

Lastly, mental health has grown beyond a focus on just treating mental “illness” when it becomes a problem, and instead also focusing on maintaining good mental health through wellness and prevention.

Successful apps that have focussed on maintaining one’s mental health include unicorn meditation apps Headspace and Calm, which have both raised upwards of US$200 million from investors such as Lightspeed Venture Partners, Goldman Sachs, TPG and Waverly Capital.

Within this sub-sector, we see a trend towards a B2B2C model, as employers become aware of the cost of mental illness to their organisations and employees look to play a more proactive role in their mental wellbeing.

Established players such as Lyra Health are well funded but we also see companies emerge at the early stage like Sahha which monitors mental health risk.

What does the future hold?

Mental health VC funding is not showing any sign of slowing down in the near term, with funding of US$852 million in Q1 2021 – what remains to be seen is if this will continue post pandemic, and if the inflated valuations we’ve seen in the past year, across the whole of digital health, will remain.

What is clear is the huge demand from people suffering from mental health issues that can be met with telehealth solutions. Opportunities also exist for players to enter the market that caters to low income populations or provide hybrid offline/online solutions where an in-person component impacts efficiency.

Digital health worldwide VC funding volume 2010-2020 (US$)

Here are Antler’s Healthtech portfolio companies.

 

• Anthony Millet is a global partner at Antler Australia.