As Americans’ mental health suffers in the wake of the coronavirus pandemic, startups addressing mental health issues are doing very well.
A survey by the CDC found that 39 percent of respondents living in the U.S. showed signs of anxiety or depression during the first week of July, a 400 percent increase since this time last year. Another survey by mental health startup Lyra Health and the National Alliance of Healthcare Purchaser Coalitions indicated that more than 80 percent of its respondents said they experienced mental health issues because of the pandemic. Not only that, but 64 percent said the same about the killing of George Floyd and the resulting unrest.
With all this happening, employers are turning to mental health startups, programs, and apps to bolster the resources they have available for employees, and those mental health startups are cashing in on employers’ needs.
According to a study by Rock Health, behavioral health startups are getting a huge influx of investments. Digital behavioral health companies have raised $588 million since January, which is a record for that sector and roughly the total annual behavioral health funding from previous years.
The investments were driven in large part by regulatory changes that allowed reimbursement for telehealth to be on par with in-person visits, and relaxation of HIPAA rules around telehealth platforms. Psychiatry platform Mindstrong Health, for example, raised $100 million in a Series C round this year. Other behavioral health companies that received venture funding in the first half of 2020 include meditation and mindfulness app developer Headspace ($140 million) and customized behavioral health provider platform Lyra Health ($75 million).
“The low-to-mid-acuity behavioral health market has become very saturated, but there is still a major opportunity for companies that address high acuity mental and behavioral health issues to help the portion of the population that is driving the majority of the cost,” said 7wire Ventures Vice President Alyssa Jaffee in the Rock Health report.
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