Calm, Talkspace, Venture Capital, Mental Health, Anxiety, Depression, Unicorn

Calm, Talkspace

Venture Funding For Mental Health Startups Hits Record High As Anxiety, Depression Skyrocket

Venture funding for mental health startups hit a record high as anxiety and depression skyrocket

6/8/2021 1:24:00 AM

Venture funding for mental health startups hit a record high as anxiety and depression skyrocket

Investors poured $1.5 billion into the market in 2020, but technology alone won’t solve long standing problems like low reimbursement rates and provider shortages.

gettyIntrepid investors started dabbling in mental healthcare over the past few years as part of a broader digital health funding boom, but many remained wary. Celebrity endorsements, like Olympic swimmer Michael Phelps’ campaign with virtual therapy startup Talkspace, started to chip away at the long standing stigma, while mindfulness apps like Calm offered meditation sessions at the click of a button. But it was the Covid-19 pandemic and collective psychological fallout that finally mainstreamed mental health.  

Cuomo Praised By Media For Decisive, Straight-Talking Approach To Harassing Aides Food giant Tyson to require vaccination for all US workers Man Assured Friend’s Tap Water Always Looks Like That

In 2019, around 11% of U.S. adultsreported experiencingsymptoms of anxiety or depression, which skyrocketed to 42% by December 2020. By year-end, venture investors poured a record-setting $1.5 billion into mental health-related startups. “When the pandemic hit, there was a two-week pause,” says Lisa Suennen, a longtime healthcare investor who leads the venture fund at the law firm and consultancy Manatt, Phelps & Phillips. “And then everything went crazy.”

Crazy indeed. There are now seven mental health unicorns in the U.S., up from two a year ago,  buoyed by the flurry of digital health IPOs, SPAC deals and M&A activity. In 2020, mental health startup funding was 5.5 times the $275 million investors ponied up four years earlier, according to headtopics.com

data from CB Insights. There were 124 deals last year, compared to 69 deals in 2016. There’s no slowdown in sight, with funding in the first quarter of 2021 topping $795 million as startups continue to jockey for post-pandemic market dominance. “I hope that the interest in mental health is now persistent,” Suennen says. The funding surge “feels very fad-like right now, which concerns me,” as do the ballooning valuations. “Some of these valuations are beyond appropriate given the underlying fundamentals,” Suennen says. “And that's not unique to mental health, that’s digital health across the board right now.”

The highwater mark was set pre-pandemic when the telepsychiatry and specialty pharmacy company Genoa Health sold to UnitedHealth Group for $2.5 billion in 2018. The next mental health startup to reach a billion dollar valuation was Calm in 2019. Lyra hit unicorn status in 2020 in a pandemic-fueled funding round, and Modern Health, BetterUp and Ginger joined the club in 2021. In January, Talkspace announced plans to go public in a SPAC deal valuing the company at $1.4 billion; the deal is expected to close later this year. In April, KKR acquired a majority interest in the mental health electronic records software company Therapy Brands for an undisclosed amount. LifeStance Health Group, an outpatient mental health provider backed by investment firm TPG Capital, announced

plans this month togo public at an estimated more than $6 billion valuation. Bob Kocher, a partner at Venrock, is betting on Lyra Health, the company he co-founded in 2015 alongside former Facebook CFO David Ebersman, to take off. “The only thing that is under-treated in American healthcare is mental health care,” says Kocher, adding that historically mental health businesses haven’t been profitable. Burlingame, California-based Lyra, valued at $2.3 billion in a January funding round, is specifically targeting large employers with customers including Morgan Stanley, eBay and Genentech.

Despite federal laws requiring mental health to be reimbursed at the same rates as physical illness, many people with insurance still face hurdles, from long wait times to denial of claims battles. Around one in four Americans don’t have access to in-network therapists, headtopics.com

Gov. Cuomo sexually harassed multiple women, NY AG probe finds British navy group: 'Potential hijack' of ship off UAE coast What should I know about the delta variant?

according to the National Alliance on Mental Illness. Many mental health providers choose to operate out of insurance networks, since the reimbursement rates are so low. Given the spotty coverage, Kocher and Ebersman hypothesized that employers would be willing to pay for a separate mental health benefit, especially since depression is one of the leading causes of disability worldwide. “This is the only company I've ever worked with, where we don't have to do marketing,” says Kocher. “That speaks to how hard access has been for most people for most of their life.” 

Read more: Forbes »

70% U.S. adults have taken at least one dose of COVID-19 vaccine - CDC

Nearly three out of four Americans above the age of 18 have received at least one dose of a COVID-19 vaccine as of Monday, according to the U.S. Centers for Disease Control and Prevention (CDC).

Ryan Reynolds Says His Three Daughters Inspired Him to Open Up About His Mental HealthRyan Reynolds has been more open about his struggles with mental health and anxiety recently and says his daughters inspired him to be more open.

Ryan Reynolds Says His Three Daughters Inspired Him to Open Up About His Mental HealthRyan Reynolds has been more open about his struggles with mental health and anxiety recently and says his daughters inspired him to be more open.

Ryan Reynolds Was Inspired by His 3 Daughters to Speak Out About His Mental HealthRyan Reynolds's daughters inspired him to speak out about mental health .

Teletherapy: What to KnowMore research is needed, but it seems teletherapy can work just as well as in-person sessions.

Ryan Reynolds says his daughters inspired him to speak out about mental healthActor Ryan Reynolds said he opened up on his own mental health struggles to show his three daughters it's important to talk about your issues DailyMirror Women make you crazy. DailyMirror Oh for gods sake another one

Naomi Osaka Withdrawals from French Open and Raises Athlete Mental Health Awareness - V MagazineThe 23 year-old tennis champion pulled out of the French Open after being fined for skipping a press conference due to her mental health