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Mental Health Tech Enters its ‘Golden Age’

Opportunities abound for workplace wellness and foreign language therapy apps.

5 Minute Read

What you need to know: Over 40 million Americans suffer from mental illness, including depression and anxiety, with 1 in 5 saying they have an unmet need. In 2018, over 100 deals in this space amounted to $800M in funding, up over 150% YoY.

How you can capitalize: Areas of opportunity include targeting the intersection between big data and mental health, especially in the workplace, niching down on specific conditions and creating popular remote therapy apps or wellness apps for non-English speakers.

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As the United States suffers from a mental illness epidemic, startups are attempting to use technology to provide patients with more options and doctors with better tools. One investor, Mantra Health’s Edouard Gaussen, describes this increase in entrepreneurial attention as “the golden age of Mental Health Tech.”

And the focus is needed. In 2017, about 17m U.S. adults, or 7% of the adult population, suffered from major depression, making it the leading disability for people between ages 15 to 44, according to data from the National Institute of Mental Health.

Until recently, people often suffered in silence. Fortunately, the stigma has been fading as Generation Z has demonstrated more comfort in discussing mental illness openly, particularly through social media platforms.

Amid an atmosphere more cognizant of America’s depression issues, White Star Capital estimated 230 mental-health startups have recently received funding, with $800m being poured in last year. That total represents greater than 100% growth from 2017, when investment totaled $300m. In 2013, less than $100m was invested.

Mental health problems are certainly not new, but the scale and catalysts of the epidemic are. The range of new issues are lending to new solutions being warranted and therefore new opportunities for companies to chip away at the evolving problem.

Despite the surgence of mental health issues being closely linked with social media and the “click economy,” many of the opportunities also lie in the digital space. Here’s how you can get involved:

Pick a niche 

Forty-two percent of the companies studied by White Star Capital targeted one specific condition, such as addiction, depression, Alzheimer’s, schizophrenia, and Bipolar Disorder. These apps aren’t meant to replace clinical support, but target prevention or augment treatment in a more sustainable and native way. They include:

  • Medical Express: A mobile video game that helps detect Alzheimer’s  
  • Futurity: An app that gives tips for managing symptoms of schizophrenia
  • eMoods: Apps that allow people to chart and track symptoms of PTSD, bipolar disorder and others. 

Though crowded, the market is not full. Even lesser-known disorders affect hundreds of thousands or millions of people. White Star notes that a tight focus leads to a stronger, more-engaged community and more efficient products.   

The firm estimates addiction to be a $740 billion market that affects 47 million people in the United States. In a recent Trends report, we wrote about Tempest (originally Hip Sobriety), a startup looking to target alcoholics opting out of traditional treatments. This $35B rehabilitation market will continue to grow as alcohol “follows the trajectory of the cigarette industry.” 

The same is likely to happen for other 21st century vices, including social media addiction and screen addiction. Talkspace, for example, has started offering a first of its kind program called Social Media Dependency Therapy. Meanwhile, Game Quitters has targeted game addiction. Niches focused on particular social offerings could lead to opportunities to build around a more specific community. 

Konichiwa, Opportunity 👋

Two-thirds of the total pool of mental health startups analyzed by White Star were based in the US. But mental health is universal. Last week, we flagged how companies like Flipkart is using Hindi to find 500m customers. This tactic may be even more critical for mental health applications; Google translate can work for buying some leggings online, but not so much when you’re dealing with getting help for a mental health condition. 

On that note, most therapy-focused applications are only offered in English. Wysa, which has received ~$4m in funding, and Woebot offer remote therapy, using English-speaking chatbots to interact with users. Even incredibly popular meditation apps are struggling to offer their material universally, with Calm offering their services in English, German, Spanish, and French and Headspace in English, French, and German. In the United States alone, there are millions of people not effectively serviced through their native tongues, and this opportunity only expands as you look globally. 

LanguageSpeaking Population United States
English only239 million
Spanish41 million
Chinese (including Mandarin and Cantonese)3.5 million
Tagalog (including Filipino)1.7 million
Vietnamese1.5 million
Arabic1.2 million
French1.2 million
Korean1.1 million
Russian0.94 million
German0.92 million
Haitian Creole0.87 million
Hindi0.86 million
Portuguese0.79 million
Italian0.58 million
Polish0.52 million
Urdu0.51 million
Yiddish0.51 million
Japanese0.46 million
Persian (including Farsi and Dari)0.42 million
Gujarati0.41 million

Workplace wellness

With depression and anxiety accounting for $1 trillion in lost productivity yearly, employers are paying at least $210.5 billion in the US alone for major medical depression. Companies in this space include MequilibriumGinger (Funding: $63.2M) and AbleTo. AbleTo worked directly with a national retailer to address behavioural health needs, resulting in quantifiable savings: 29% less ER visits, 46% less hospitalization admissions, and 67% less inpatient days. Productivity also increased, with 52% less absenteeism,  45% less presenteeism (working while sick), and 38% less overall work impairment. 

Past the nap pods and unlimited free food, there’s an opportunity to help employers make a tangible impact on the health of their people. Some companies, like Vitality, have created a health-focused rewards program for employees. They coin themselves as, “the first insurance company to reward people for healthy living.” With the improved connected device landscape, Vitality has been able to sync directly with fitness trackers, mindfulness apps, Amazon, and more, to encourage people to build positive long-term habits. The business case? They keep employees healthy, which keeps employers happy, and lowers the likelihood of the insurance being used. As they say, “good for you, good for us and good for society.”

There’s also opportunity to take targeted programs that a few giants have built internally, like Union Pacific’s smoking cessation program or Accenture’s employee assistance program, and provide them to a wider market of companies that are too small to build their own infrastructure. The ROI of wellness is clear on a macro-level, but there’s a gap waiting to be filled in helping companies measure wellness within their organizations, how their wellness compares to the average and how it impacts their bottom line.

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