Part 2 of 2
A two-part report on the global depressed population; the role of technology in causing depression; and a VC’s investment framework for solutions.
Part 1 looks past the current hype (read: media coverage) around depression to primary census data to understand if there are structural changes in the global depressed population over the last 20–60 years (country/data dependent).
Part 2 proposes OMERS Ventures’ investment framework and looks at interesting startups across the life-cycle of care for depressed patients.
Special thanks to the leadership team at OMERS Ventures who supported me with time, intros, and resources to pull together this research over the past few months.
3.0 Mental Health Technology Funding Ecosystem
Venture capital funding of mental health, mindfulness, and therapy startups has exploded over the past decade, increasing by 8.3x since 2013. Since 2015, mental health technology startups have raised USD $1.5 billion in venture capital funding. [1]
Funding has historically been directed to US companies but we are seeing an increasing flow of capital towards Asian startups focusing on mental health.
Mental health is a global affliction that we believe is highly localized by region-based cultural norms and public health policies. We expect to see localized solutions, treatments, and investment opportunities that reflect the nuances of regional markets.
4.0 OMERS Ventures’ Patient Journey Investment Framework
We propose a value-based framework to align potential technology-enabled solutions to the lifecycle of patient care: subclinical (does not meet the clinical threshold for depression), diagnosis, treatment, and post-treatment. Using this methodology, we can segment investment opportunities by their place in the lifecycle of care for a depressed patient.
Figure 12.0 OV’s Patient Journey Investment Framework
Subclinical and Post-Treatment are denoted as distinct phases with the key difference being that a patient in post-treatment lives with the diagnosis of depression despite having completed treatment. This is in contrast to an individual in the Subclinical zone who may be dealing with some or all of the symptoms of depression but has not been diagnosed and therefore has different treatment needs and expectations for technology solutions.
4.1 Pre- Diagnosis or Subclinical Depression
Before a clinical diagnosis of depression, technology can support those living with psychological stress and even mild to moderate symptoms of depression.
4.1.1 Meditation — Mobile Applications
Mobile meditation and mindfulness apps like Calm, Headspace, Buddhify, Insight Timer, Aware, and others have been shown to reduce psychological stress and can be as effective as pharmacological solutions for patients with mild mental ailments, including depression.[2] Calm and Headspace are the leading mediation applications, having raised USD $28.3 million and USD $74.3 in venture financing respectively. Calm most recently reached a post-money valuation of $277 million led by Insight Venture Partners with participation from Ashton Kutcher’s Sound Ventures.
Company Spotlight
10% Happier has built a meditation app for skeptics of meditation. The app is based on Dan Harris’ bestselling novel of the same name and offers expert advice via text and video content from scientists, psychologists, meditation teachers, and athletic psychologists who have worked with the Chicago Bulls, LA Lakers, and NY Knicks. The company has raised USD $5.6 million from Trinity Ventures, Coastal Ventures, Khosla Ventures, and others. I personally loved Dan’s story of how we went from skeptic to believer, with biographical vignettes that complete the narrative.
Simple Habits helps busy professionals squeeze mindfulness into their day in 5-minute increments. The idea came to Yunha Kim, a tech founder who sold her last app to Wish in 2015 and wanted a better way to find peace in her hectic days. Simple Habit has raised USD $2.5 million from Foundation Capital, FJ Labs, Y Combinator, and Drew Houston of Dropbox.
Investor Takeaway: We believe mediation applications will continue to play an important role in alleviating mild psychological distress but will be unable to replace psychological and pharmacological treatments for patients suffering from moderate to severe depression.
4.1.2 Meditation — Physical Accessories
Headbands that monitor brainwaves can augment the meditation experience by guiding patients through the process. The Muse headband by InteraXon (an OMERS Ventures portfolio company) is a leading product in this category and is recommended by mental health professionals to help patients suffering from mild to moderate depression and anxiety. InteraXon has raised USD $29.8 million in venture financing from OMERS Ventures, Horizon Ventures, and others.
4.1.3 Meditation — Technology-Enabled Meditation Clinics
Ultra-premium meditation clinics have emerged that leverage technology to enhance the quality of meditation across a spectrum of mindfulness experiences. Inscape is an example of a vertically integrated studio with a physical location in Manhattan and a corresponding iPhone application that guides users through meditation experiences in the studio and outside to provide a comprehensive wellness solution. Mindset Brain Gym in Toronto features a lounge with Nanoleaf LEDs that alter the ambiance of the room by adjusting to the tone and pace of the music, Muse headsets to track brain activity and stillness pods with six prerecorded guided meditation lessons projected from 3D-audio immersive speakers.
4.1.4 Employer Solutions — Wellbeing Assessments
Wellbeing assessment solutions are a category of enterprise applications that extend traditional Human Resource Information Systems (HRIS) with modern survey tools to get a snapshot of the organizational health and capture data specifically regarding mental health.
Company Spotlight
League (an OMERS Ventures portfolio company) is a modern employee benefits platform that enables employees to actually use their benefits (i.e. health, dental, insurance, professional development, etc.), earn points for completing fitness challenges, and spend their balances on exclusive offers in the application’s marketplace from leading health and fitness brands, all via a consumer-grade mobile experience. The company has raised USD $76.2 million from OMERS Ventures, TELUS Ventures, the Royal Bank of Canada, BDC Capital IT Fund, and others.
me@mybest by PSYT Psychological Technologies is a people analytics platform that surveys employees’ holistic wellbeing and provides anonymized insights back to managers to guide their people and talent strategies. Along this vein of solutions, LinkedIn recently paid a rumored USD$400 million to acquire employee survey application Glint which does not specifically focus on mental health — but we expect this to be on their survey roadmap.
Unmind is a workplace mental health platform that provides scientifically-backed HR, coordination, and mindfulness applications with enterprise grade analytics, insights, and support features. The company was founded in 2016 and is based in the UK with no funding data available on PitchBook.
LifeWorks (acquired in July 2018 by Morneau Shepell for CAD$426 million) takes a holistic approach to mental, financial, psychical, and emotional wellbeing in a single, mobile-first platform with access to 24/7 counselling, expert mental health content, fitness challenges, and doctor-supervised assessments.
4.2 Diagnosis
Technology can play a leading role in diagnosing depression. Considering that most experts agree depression is underreported or undiagnosed due to cultural stigma and lack of access to mental health care services (see Part 1), using technology to help flag or diagnose depression presents a meaningful way to impact patients’ lives.
4.2.1 Depression Screening Tools
Developers have encoded standardized medical screening tests for depression, like the Patient Health Questionnaire-9 (PHQ-9), the Center for Epidemiological Studies-Depression Scale, or the Hamilton Rating Scale for Depression (HRSD) onto smartphone apps.
Company Spotlight
Moodpath asks daily questions to screen for symptoms of depression. By using the questions to measure users’ well-being and screen for symptoms of clinical depression, the app seeks to increase users’ awareness and understanding of their thoughts and feelings.
4.2.2 Voice-based Diagnosis
Voice-as-the-interface exploded in 2017 and 55% of all households in the US will have a voice enabled device, like an Amazon Echo, Google Home, or Sonos One, by 2022.[3] Seeing the opportunity to collect and analyze rich voice data, researchers at MIT used neural network models to learn patient speech patterns and predict depression in clinical interviews.[4]
Investor Takeaway: while still early into the research, we expect to see increasing investment into voice and video diagnostic systems for mental health.
4.2.3 Text-based Diagnosis
Researchers have been using natural language processing (NLP) models to detect depression-related cues from language for over three decades. Recently, researchers at Indiana University applied NLP models to 12,106 Reddit users’ posts and could diagnose depression markers with reasonable accuracy for use in large-scale community monitoring.[5]
Company Spotlight
Koko.ai is a company that pivoted from voice-based depression monitoring to text-based community health monitoring. The team is out of MIT and has raised USD $2.6 million from Union Square Ventures and Omidyar Network.
Investor Takeaway: we expect to see an increased investment in teams building that can accurately monitor massive amounts of user generated content, with text likely being a secondary focus to both voice and video.
4.2.4 Behavior-based Diagnosis
A less invasive approach to diagnosis is passively collecting data and metadata from a user’s digital exhaust to establish a virtual profile of their behavior and periodically compare this profile to either the user’s past actions or an aggregate benchmark from other users. This approach is enabled by our passive creation of location, call, SMS, and app usage data from our smartphones.
Company Spotlight
Mindstrong Health is a monitoring app that takes cues from the way a user types, taps and scrolls while using their phone to determine a user’s baseline mental cognition from the number of errors they make while typing or how quickly they scroll a list of contacts. Using machine learning, the app can notify both the user and their health care professional when usage deviates and there is evidence of mental health risk.
4.3 Treatment
Once diagnosed with depression, technology can be incorporated to a comprehensive treatment plan to extend and amplify traditional pharmacological and psychological treatment regimens.
4.3.1 Psychological Treatment Apps: Cognitive Behavioral Therapy
There is a group of apps including Lantern, Depression CBT Self-Help Guide, What’s Up, and iCBT that have codified the popular treatment regimen Cognitive Behavioral Therapy (CBT) into a mobile experience for patients. CBT is a leading psychotherapy modality that has users question their base assumptions about their current and future experiences which creates negative or unwanted emotions. Interviews with psychotherapists suggests that while an app will be less responsive than a medical professional who also has the benefit of collecting information about the patient’s tone and speed of voice, body language, and other non-verbal cues, a patient who is previously trained in CBT may get significant value from a guided self-reflection.
4.3.2 Mood Tracking Apps
Mood tracking apps like Daylio, MoodHacker, Moodkit, and Moodcast allow users with depression to record their general mood and activities and provide patients them with a sense of progress and temporality.
Company Spotlight
Pacifica does mood tracking, meditation guides, goal setting, thought critiquing, as well as peer support via shared stores and advice from other patients. The company raised a USD $1.4 million seed from LEO Innovation Lab, HealthX Ventures, and PHS Capital.
Investor Takeaway: given the relatively simple nature of these applications, which largely differentiate based on brand/interface, we do not expect to see a significant amount of venture investment into this specific category.
4.3.3 Journaling Apps
Apps like Moodnotes or Moodtools focus on journaling as a technique to help depressed patients articulate their specific concerns and identify flaws in their logic or hyperbolic assumptions that can contribute to their negative mood. Clinical studies have shown journaling to be an effective way of managing mood levels and attitude for depressed patients.[6]
Company Spotlight
The Stigma app takes a unique approach to augmenting the journaling process by building a word cloud to highlight the worst used most often when writing posts about your negative experiences. This can allow users to spot trends in their writing and reflect on the root causes of these emotions. The company has raised an undisclosed seed round from Slow Ventures.
4.3.4 Game-Based — Therapy Apps
A few teams are borrowing game mechanics to level-up patients in key skill areas to help them fight the symptoms of their depression.
Company Spotlight
Equoo is a mobile application that teaches players key psychological skills by guiding their character through a series of real-life challenges that can be solved with healthy mental health and physical habits. The game opened the Beta in Australia and New Zealand and has a weekly growth rate of 19% and a 4.8 rating in the app store. The company is based in the UK and has raised USD $0.4 million from angel investors and Indiegogo.
SuperBetter challenges users with quests to build four kinds of strength: social, emotional, mental, and psychical and was shown in a study by the University of Pennsylvania to improve the moods of people who used the app for at least 30 days.
Happify is a self-improvement program that measures your baseline happiness and provides little tasks and games to help you increase it. The company is based in New York and has raised USD $25.6 million from TT Capital, Hills Capital, and Mangrove Capital amongst other investors.
4.3.5 Chat-Based — Virtual Therapists
Advances in Natural Language Processing (NLP) led to a much-hyped explosion of chatbots in 2017 with mixed results: we are somewhere between the Turing and the Singularity. However, simple developer-focused platforms from IBM, Microsoft, Facebook, and others allowed brands to experiment with virtual assistance through web and social channels. Teams have since taken these basic communication skills and encoded them with a psychologist skill set to offer psychotherapy services via chatbots.
Company Spotlight
Serenity is an easy to use 24/7 CBT companion for depression, stress and anxiety that users can interact with via Facebook Messenger. The bot will perform daily check-ins and keep a log of the users’ mood so they can review their progress.
Woebot offers a chatbot for emotional support and therapy with step-by-step guidance based on proven CBT methods in over 100 evidence-based lessons. The company has raised USD $8 million from New Enterprise Associates.
Shine is a free service that sends out daily messages via text or Facebook with advice, positive reinforcement and motivational sayings. The company has raised USD $8.8 million from Comcast ventures, The New York Times, BBG Ventures, Betaworks, and others.
Wysa is an AI-based ‘emotionally intelligent’ bot that claims to help users manage their emotions and thoughts through an array of tools and techniques such as evidence-based CBT, Dialectical Behavior Therapy (DBT), as well as guided meditation, breathing, and yoga. The company has raised USD $1.7 million from Kae Capital and others.
Joy takes a passive data collection approach by collecting the user’s physical activity, location and movement patterns in addition to social interactions, and self-reported mood and energy via its Facebook and Slack chatbots.
Tess is a chatbot built by clinical psychologists to coach people through tough times to build resilience, by having text conversations — similar to talking to a friend or coach, paid for by their employer.
Investor Takeaway: We expect to see increasing investment in chat-based virtual therapists. Solutions that leverage non-text cues (i.e. Joy’s passive data collection) offer a way to make up for the lost information gathered by a traditional therapist by a person’s facial expressions, body language or voice inflections.
4.3.6 Chat-Based — Licensed Therapists
Driven by the convenience of mobile, platforms have emerged that connect depressed patients with real psychologists to engage in a traditional therapy treatment via text and chat.
Company Spotlight
Talkspace first matches you with an available licensed therapist, then allows you to send messages (text, voice message, video message, or photo). The company was founded in 2011, is based in New York, and has raised USD $59.6 million from Qumra Capital, Norwest Venture Partners, Spark Capital, SoftBank Capital, and others.
Ginger.io provides on-demand text coaching services and scheduled video sessions with licensed therapists and psychiatrists as part of an employer’s employee assistance program (EAP). Ginger.io’s customers include BuzzFeed and Pinterest and the company claims that up to 30% of a company’s employees will use the service once initiated. The company was spun out of the MIT Media Lab in 2010 and has raised USD $28 million from Kaiser Permanente Ventures, Khosla Ventures, True Ventures, and others.
4.3.7 Chat-Based — Unlicensed Coaches
Another approach to chat-based therapies has been to connect depressed patients to coaches, teachers, or other unlicensed professionals for more informal assistance — ostensibly trading professional designations for network scale and speed of response.
Company Spotlight
Joyable is platform that matches patients with trained coaches to connect via phone, text, or email. The company has raised USD $15.1 million from Thrive Capital, Harrison Metal Capital, and the Collaborative Fund.
7 Cups is a free, anonymous, confidential online text chat with trained listeners, online therapists and counselors that has facilitated over 29 million conversations. The company received USD $20,000 from Y Combinator as part of their summer 2013 batch.
TalkLife is analogous to a Whisper or (RIP) Yik Yak (which was once valued at USD $400 million) allowing users to post their mental health concerns and connect with other people who are suffering or eager to help. TalkLife is monitored by clinicians to spot dangerous comments or negative interactions. The company has raised $1.3 million from Leo Innovation Lab and Bethnal Green Ventures.
4.3.8 Video-Based Medical & Paramedical Therapists
Telemedicine promises to transform the model and reach of modern healthcare professionals by expanding access to health services beyond physical limitations. Telemedicine startups have raised over $1.2B since 2013 including IPOs from market leaders like Teladoc and Telehealthcare.[7]
Company Spotlight
Oncall Health offers a PHIPA- and PIPEDA-compliant, encrypted video platform to major health clinics across Canada and the US. The company is based in Toronto and has raised an undisclosed seed round from Ripple Ventures.
Regroup offers a HIPAA-compliant video platform with end-to-end encryption for medical and psychiatric professionals to connect with their patients. The company has raised USD $14.5 million from OSF Ventures, Sandalphon Capital, and Frist Cressey Ventures.
LARKR is focused explicitly on enabling mental health care professionals with matching algorithms that find therapists with the right experience to serve a patients specific needs and effortless, integrated billing. The company raised USD $100,000 in seed funding from undisclosed investors in March of 2017.
4.4 Post-Treatment
After completing a clinically supervised treatment program, patients now live with a very real understanding of what their unique experience of depression feels like and are hopefully armed with a set of skills to combat any future depressive episodes.
4.4.1 Suicide watch Apps
Most treatments for depression are episodic — helping the patients work through a specific experience and preparing them for life after treatment. Once they exit this highly supervised state, patients can feel somewhat isolated. A group of apps helps post-treatment patients build a plan if they ever experience strong suicidal feelings and are unable to access their traditional support network.
Company Spotlight
MY3 was designed for people who are depressed or suicidal, the app trains users to recognize suicide warning signs in themselves and others. MY3 prompts users to choose three close contacts that they would feel comfortable contacting when feeling particularly low.
4.4.2 Mobile Time Monitoring Apps
At their respective 2018 developer conferences, Apple announced Screen Time and Google showed off Digital Wellbeing — time monitoring applications built directly into their mobile operating systems to limit the time a user spends on their phone.[8] Each of the monitoring systems reports time spent in specific applications, allows users to set their own limits for each app, will notify the user when that time limit is exceeded and potentially lock them out of the app. These controls are extended for parents to monitor and lock application use on their children’s devices. Mobile time monitoring apps can be used by post-treatment patients to keep them from falling back into potentially destructive or deleterious habits once their traditional support phases out.
Company Spotlight
Moment was founded in 2014 as a third-party application that monitors application use and allows users to set hard limits on screen time for themselves and their children. According to data from Pitchbook — the team has not raised venture capital financing.
5.0 Summary
How we decide to address mental health will have broad social, political, and economic implications that will shape large parts of industry and culture in coming decades.
Part 1 Summary:
Despite the unrelenting growth of global antidepressant prescriptions, there is insufficient evidence today to support the theory that technology addiction is causing a mass onslaught of depression, even amongst adolescents. However, we are encouraged by the mounting pile of research that suggests this link will be universally accepted by the scientific community in the coming years.
Part 2 Summary:
We believe that we are in the early days of investment and innovation driving positive patient outcomes using technology. The ability to deliver zero-marginal cost health care with equal, if not greater, predictive abilities than human therapists is an incredible compelling inevitability.
We believe there will be an emergent class of businesses that drive tremendous economic and social value over the next decade and are exited to partner with the entrepreneurs at the forefront of this movement.
If you are building in this space and would like to connect — please reach out by email to mgoad@omersventures.com.
Sources
[1] OMERS Ventures Analysis of data from Pitchbook.
[2] Meditation Programs for Psychological Stress and Wellbeing, Goyal et. al., Journal of the American Medical Association, 2014.
[3] Digital Voice Assistants: Platforms, Revenues & Opportunities 2017–2022, Juniper Research, 2017.
[4] Models can more naturally detect depression in conversations, Rob Matheson, MIT News, 2018.
[5] Detecting Linguistic Traces of Depression in Topic-Restricted Text: Attending to Self-Stigmatized Depression with NLP, Wolohan et. al., Department of Information and Library Science Indiana University — Bloomington, 2018.
[6] Ten ways to improve the treatment of depression and anxiety in adults, Dunlop et. al., Mental Health in Family Medicine Journal, 2013.
[7] Telemedicine Startup Funding, CB Insights, 2017.
[8] How do Apple’s Screen Time and Google Digital Wellbeing stack up?, Chaim Gartenberg, The Verge, 2018.
