šŸ§µ Unravelling Mental HealthTech: How Ecosystems Are Addressing The Crisis

Soo Min Hong
Included VC
Published in
21 min readDec 11, 2023

Hi folks, Iā€™m Soo Min ā€” Included VC Fellow (Classā€™ 23). Iā€™m always up for a chat, so feel free to reach out, whenever! Iā€™m on LinkedIn or if youā€™re wanting to write to me, you can catch me via email. That being said, letā€™s dive into the subject of today: Mental HealthTech.

šŸ‘‰ The TL;DR

šŸ“Š The market presents numerous investment prospects from adaptable early-stage startups to companies focusing on cross-platform integration, data privacy, and strategic partnerships with healthcare providers. There is further high potential for regional/country-specific development and expansion.

šŸ˜¬ Mental HealthTech also has its fair share of risks and challenges, including: regulatory compliance, user adoption and retention, ethical concerns like biases and data processing, as well as the issue around whether solutions are scientifically accurate and medically-backed.

šŸ”„ More soon on the unexplored Mental HealthTech segments that may quickly become reason for FOMO in VCs investing within the space. Follow me on LinkedIn to get updates.

If youā€™re ready to dive deep with me into the universe of Mental HealthTech, we can break down this Deep Dive largely into 3 sections:

  • šŸ§ Chapter 1: Exploring the impact of the Mental HealthTech market
  • šŸŒŸ Chapter 2: Reviewing the key segments of the market ā€” an overview of how timely Mental HealthTech is for VCs in clear numbers
  • āš–ļø Chapter 3: Going forward ā€” assessing opportunities & investment prospects, risks & challenges

šŸ“ˆ Mental Health Issues: A Growing Crisis

Youā€™ve probably seen it on the internet ā€” #MentalHealthMatters, floating around after the collective trauma that was the Covid-19 pandemic. Many of us experienced multiple hard lockdowns, feeling both lonely due to restricted human interaction and anxious about having to stay at home constantly. Since the Covid-19 pandemic, mental health has become a hot topic for both individuals and companies, highlighting the painful truth that anyone can be affected. While previous generations may have avoided talking about the topic in a very public manner, the newer generations do not shy away from it. From content on TikTok to Instagram, there are Influencers posting fervently about how we can improve our mental well-being ā€” as well as open testimonies about suffering from mental health issues that have affected their lives.

Beyond a change in how generations perceive mental health issues, the number of people suffering from them has been increasing steadily ā€” and will continue to do so.

Source: Statista

We need to consider this growing number could be a larger reflection of changing attitudes towards mental health issues; as opposed to the actual total increasing number of people that suffer from mental health issues. However, the fact that this number is growing at all is an indication that mental health issues are a problem that is here to stay ā€” and it is clearer than ever that we need solutions for them. So why are people only visibly speaking up now?

There are many possible reasons for which the conversation has finally picked up:

šŸ’„ Our quality of life has changed since the 2008 Financial Crisis, with increasing economic instability and inequality. Both economic instability and income inequality have a profound impact on mental health, as financial stress, job insecurity, and limited access to resources can lead to anxiety, depression, and other mental health issues.

šŸ’ø The years following the 2008 Financial Crisis have been marked by rapid changes, technological advancements, and increased societal pressures. The fast-paced, competitive nature of contemporary living often leads to chronic stress, anxiety, and burnout. Another significant change that has impacted our relationship to mental health has been the widespread adoption of digital technology and social media ā€” which has transformed how individuals interact and process information. While these platforms offer connectivity, they can also contribute to feelings of inadequacy, cyberbullying, and addictionā€¦ Adversely affecting mental health ā€” especially in young teens.

šŸŒµ Beyond societal changes, changes in the environment have been cited as influencing our mental health. There is growing evidence that environmental factors (such as exposure to pollution and environmental toxins) may contribute to the rise in mental health disorders. Research suggests that air pollution, for example, can impact brain health and cognitive function. Regions that suffer the most from the effects of climate change and global warming such as South-East Asia, South Asia, and Africa are indicated as the most affected.

Beyond all of the reasons cited above, the Covid-19 pandemic has been the most recent circumstantial reason for which people may have chosen to speak up about mental health issues. Accompanied by global events such as natural disasters and armed conflicts, the number of people suffering from mental health issues has been influenced at a large scale. For example, traumatic experiences and prolonged stress from the combination of such events has led to a surge in mental health disorders within affected communities. These circumstances have both been further exacerbated by the previously mentioned factors such as climate change, global warming, and economic crises ā€” making matters worse.

One thing is for sure: the rise in the prevalence of mental health disorders is a complex and multifaceted issue with far-reaching implications for individuals and societies. Nonetheless, there has thankfully been a shift in the discussion when it comes to mental health both personally as well as at the workplace ā€” and as such, the market has similarly reflected this change, with the rapid development of Mental HealthTech.

šŸŒ Mental HealthTech & the Market

What is Mental HealthTech? Defined simply, Mental HealthTech refers to:

the integration of technology, digital tools, applications, and devices with mental healthcare to support, diagnose, and treat mental health conditions. It encompasses a wide range of technological innovations designed to improve mental well-being, enhance therapeutic interventions, and (at times) offer accessible and personalised mental health support to individuals. The central goal of Mental HealthTech is to leverage the power of technology to address the complexities of, reduce the stigma around, and improve outcomes for individualsā€™ mental health worldwide.

Segments of Interest in the Market

That being said, letā€™s have a look at the main segments of interest when it comes to the Mental HealthTech market.

Note: If youā€™re missing from the Map, please let me know! Iā€™m happy to update it any day

1. Mental Health Apps

Mental health apps are most usually smartphone apps focused on well-being, and represent one of the most prominent segments in the market. In 2022 only, this segment dominated the market with a revenue share of over 29.8%.

These apps offer features like mindfulness/meditation exercises, mood tracking, Cognitive Behavioural Therapy (CBT) tools, and mental health assessment quizzes. Many of them also leverage AI and machine learning algorithms to personalise user experiences and tailor interventions based on individual needs.

An example for some of us living in Europe/North America are Headspace and Calm, which, if youā€™re based in the above regions ā€” youā€™ve probably at least seen or tried out. They are classic examples of guided-meditation apps that put forward the improvement of usersā€™ mental health as their utmost priority. Made for busy individuals that need accessible and/or convenient ways to prioritise their mental health, both Headspace and Calm have a clear understanding of who their target audience is.

Two well-known mental health apps ā€” Calm & Headspace

Both provide an easy ā€œentry-levelā€ solution to people that need a touch of mental health support as opposed to a full-blown solution for a problem that impacts their life on a daily basis. As we can see with Headspace and Calm, mental health apps tend to lean towards the preventative.

Mental health apps grew significantly in valuation throughout the Covid-19 pandemic, as we saw with Calm, founded 2012, with a post-money valuation of USD 1.86B as of December 2020. Calm has raised a total of USD 185,06M as of July 2023 with its largest sums having been raised throughout the Covid-19 pandemic. PitchBook Data evaluates Calmā€™s likelihood of a successful exit at 96% with a 36% probability of a M&A and a 60% probability of an IPO.

Investors include BluePointe Ventures and Brighter Capital.

The VCs that have backed Calm

2. Teletherapy & Online Counselling

Teletherapy platforms allow users to connect with licensed mental health professionals through secure video conferencing. This approach improves access to mental health services, especially for those living in remote areas or with limited mobility. This type of platform can service individuals, employers, and/or peer-to-peer groups, where the individual model tends to focus on B2C and the employer one, on B2B2C. The peer-to-peer model tends to rely on community-driven interactions.

As many of us may have identified, the Covid-19 pandemic rapidly accelerated the adoption of teletherapy, as social distancing measures limited in-person consultations.

Services such as BetterHelp* and TalkSpace are widely used in Europe/North America, but there are also more country-specific solutions that pop up such as Mindler in Sweden. Classic examples of employer iterations are Lyra Health, Ginger, or Unmind. A peer-to-peer example is 7 Cups.

*The alleged controversy surrounding BetterHelp will be addressed further below

Employer iterations for employee teletherapy and online counselling ā€” Unmind, Lyra Health, Ginger

To illustrate the extent to which teletherapy has taken off, Lyra Health, founded in 2015, raised USD 235M of Series G venture funding in a deal led by Dragoneer Investment Group on January 19, 2022, putting the companyā€™s pre-money valuation at USD 5.62B. The Covid-19 pandemic accelerated Lyra Healthā€™s investments, pushing it forward from Series C in 2020 to Series G in 2022. PitchBook Data evaluates Lyra Healthā€™s likelihood of a successful exit at 98% with a 19% probability of a M&A and a 79% probability of an IPO.

Other investors include Salesforce Ventures and Durable Capital Partners.

The VCs that have backed Lyra Health

3. Wearables and Biometric Sensors

In 2023, mental health tracking transitioned from mere novelty to a powerful tool for understanding oneā€™s emotional and psychological well-being.

Advanced wearables, equipped with sophisticated sensors, provide real-time data on key physiological parameters, such as heart rate, skin conductance, and sleep patterns. These data insights enable individuals and their healthcare providers to identify patterns, triggers, and potential warning signs of mental health conditions, promoting early intervention and preventive measures.

Wearables are at times used simultaneously with mental health apps, as the data gathered can help individuals draw early hypotheses about their health. Furthermore, tracking is valuable for the improvement of the experience or even engagement with these apps.

Classic wearables ā€” The Apple Watch, The Samsung Galaxy Watch, and the FitBit

The most obvious example of wearables are Smart Watches, the most popularly used ones being the Apple Watch, the FitBit, and the Samsung Galaxy Watch.

A slightly less popular choice, yet still an option is a Smart Ring, which Oura Ring offers.

The Duke Of Sussex spotted wearing an Oura Ring

While wearables and biometric sensors represent a segment of the Mental HealthTech market, they werenā€™t necessarily pushed forward in the same way by the Covid-19 pandemic as mental health apps or teletherapy.

FitBit (launched 2015)ā€™s growth, for example, has plateaued since 2017 with little fluctuation throughout the Covid-19 pandemic. It has a post-money valuation of USD 1.91B and has raised a total of USD 1B as of January 2021. FitBit was acquired in 2021 by Alphabet, however, so it may be interesting to see whether they will be releasing a more sophisticated health tracking service that may integrate with FitBit.

4. AI-Powered Personalised Therapy

AI has taken personalised therapy to unprecedented levels in 2023. With its powerful algorithms AI can now analyse vast amounts of behavioural and cognitive data to tailor therapy sessions to each individualā€™s unique needs and challenges.

Virtual therapists ā€” built on the foundation of natural language processing and emotional intelligence ā€” engage in empathetic conversations, offering a safe space for users to discuss their emotions without fear of judgement. This access to continuous support, even outside traditional therapy sessions, has proven to be transformative for many individuals.

When it comes to AI-powered personalised therapy, Woebot Healthā€™s AI-driven chatbot designed to deliver CBT and other evidence-based interventions is often used by those based in Europe/North America, mainly to manage anxiety and stress. While users have mentioned AI-driven chatbots as less useful long-term, they can be a great support at the early/preventative stages.

Key AI-powered virtual therapy apps ā€” Woebot Health, Cass, and Wysa

Woebot Health, founded in 2017 grew post the Covid-19 pandemic. As of July 2021 it has a post-money valuation of USD 216M and has raised a total of USD 131M as of March 2022. Other key competitors in the market include Wysa and Cass. PitchBook Data evaluates Woebot Healthā€™s likelihood of a successful exit at 88% with a 67% probability of a M&A and a 21% probability of an IPO.

Investors include Alumni Ventures and Owl Ventures.

The VCs that have backed Woebot Health

5. VR/AR

VR has emerged as a game-changer for exposure therapy, particularly in the treatment of anxiety disorders and PTSD ā€” especially post Covid-19 pandemic.

Cutting-edge VR simulations allow therapists to recreate challenging scenarios in a controlled environment, allowing patients to confront their fears and traumas safely. Through repeated exposure, individuals can gradually build resilience and reduce anxiety in real-life situations, fostering lasting therapeutic benefits.

Similarly, AR is revolutionising the way individuals cope with stress and anxiety in their daily lives. AR apps offer personalised coping mechanisms, such as mindfulness exercises, breathing techniques, and positive visualisation, seamlessly integrated into the userā€™s environment. With these tools at their fingertips, individuals can access instant support during moments of distress, helping them manage their mental well-being proactively.

VR/AR x Mental HealthTech players ā€” Limbix, Amelia Virtual Care (by XRHealth), and Virtually Better

Some examples of companies that focus on developing VR/AR technology to improve peopleā€™s mental health include Limbix (acquired by Big Health in 2023), Amelia Virtual Care (by XRHealth), and Virtually Better.

From Virtually Betterā€™s website promoting their virtual ā€˜Phobias Suiteā€™ for patients suffering from fear of flying and heights among other fears // Source: Virtually Better

While Amelia Virtual Care (founded in 2012)ā€™s growth was not as explosive throughout the Covid-19 pandemic as with mental health apps or teletherapy, it has shown steady growth since 2019. As of April 2019 it has a post-money valuation of USD 7,33M and has raised a total of USD 15,15M as of April 2023. The company reached a definitive agreement with XRHealth through a reverse merger.

6. Brain-Computer Interfaces (BCIs)

BCIs are at the forefront of cognitive enhancement in 2023, aiding individuals in improving focus, memory, and attention.

From neurofeedback training to brainwave modulation, these interfaces open up new frontiers for optimising cognitive function and addressing specific mental health conditions, such as ADHD and depression.

A simplified overview of how BCIs work

As of today, however, most of whatā€™s being developed for BCIs stay within the highly medical/academic spaces, and there has been so far little traction for BCIs in the venture-backed space.

Some names leading the BCI space ā€” Kernel, NeuroPace, and OpenBCI

Key actors in the market include NeuroPace, Kernel, and OpenBCI.

Founded in 2016, Kernel has raised a total of USD 54,75M as of February 2021. Investors include Khosla Ventures and Manta Ray Ventures.

Similarly, OpenBCI, founded in 2014, has raised a smaller total of USD 2,21M as of March 2023.Investors include BITKRAFT Ventures and Inertia Ventures.

The VCs that have backed Kernel & OpenBCI

7. Others Segments Worth Mentioning

šŸ«‚ Online Support Communities. Technology has facilitated the creation of online support communities, connecting individuals with shared experiences and mental health challenges. These communities offer a safe space for peer support, reducing feelings of isolation and promoting understanding and empathy. Some classic examples are communities on Reddit, Facebook, Discord, or WhatsApp.

šŸ“ˆ Data Analytics & Predictive Models. Data analytics and predictive models are being used to analyse large datasets related to mental health, such as electronic health records and social media data. By identifying patterns and risk factors, these technologies can aid in early detection of and intervention for mental health disorders.

šŸ‘¾ Gamification for Mental Health. Gamification techniques are being incorporated into mental health apps and interventions to enhance engagement and motivation. Gamified elements, such as rewards and challenges, make mental health activities more enjoyable and encourage consistent use.

How Opportune, Really? A Dive into Numbers

The Mental HealthTech market was valued at USD 5.2B in the year 2022 and is forecast to reach a value of approximately USD 15B by the year 2030.

The market is anticipated to grow to exhibit a Compound Annual Growth Rate (CAGR) of 15.9% over the forecast period ā€” showing great potential.

The expansion of the market is driven by the increasing prevalence of smartphones and internet usage. For reference, a 2021 report from Ericsson indicated that mobile subscriptions exceeded 6 billion and are projected to rise in the coming years.

Additionally, reports have shown that as of Q1 2021, global internet penetration stood at approximately 65.6%. As a result, the rising adoption of smartphones, internet connectivity, and social media is expected to drive market growth throughout the forecast period.

Source: Statista

As we all know, the Covid-19 pandemic resulted in a surge in downloads of mental health apps and raised significant awareness about the severity of mental health issues.

This has showcased substantial growth potential within the digital health and mobile health sectors. The adoption and popularity of such apps have been further bolstered by studies and research highlighting their advantages, leading to increased demand.

For instance, a 2019 research study featured in the Journal of Medical Internet Research focused on evaluating the effectiveness of an app designed to promote well-being and manage stress. The study showcased positive outcomes, as respondents reported significant reductions in stress levels after using the app.

As for geographic repartition, in 2022, the United States (US) held a dominant position in the market, accounting for more than 37.4% of the total revenue share.

This significant market dominance can be attributed to key factors such as the widespread acceptance of smartphones, advancements in coverage networks, and increased internet and social media penetration. Not to mention, a high demand for development in Mental HealthTech as the medical system in the US is in large part privatised.

As per GSMAā€™s The Mobile Economy Report 2021, smartphone adoption in the North American region was approximately 80% in 2020 and is projected to reach 85% by 2025, further contributing to the regionā€™s market growth.

During the forecast period, the Asia Pacific region is anticipated to experience significant growth due to the increasing demand for connected devices and the widespread adoption of smartphones in the area.

Moreover, several countries within the region are embracing digital health and mobile health technologies to enhance healthcare outcomes and delivery. As a result, these initiatives are expected to drive the adoption of mental health apps in the region.

By dissecting the various segments of the Mental HealthTech market and analysing the trends, weā€™ve seen that the market has experienced significant growth and attracted substantial attention from investors, entrepreneurs, healthcare providers, and users alike. However, you may be asking yourselves: what were the reasons behind this growing interest beyond the Covid-19 pandemic? Itā€™s definitely a valid question, and Iā€™ll be answering that just below.

Beyond the Covid-19 Pandemic: What are the Reasons for this Growing Interest?

1. Increased Awareness & Destigmatisation in Europe/North America

One of the primary drivers behind the increased awareness around mental health issues has been the rise of advocacy efforts and public awareness campaigns. Mental health organisations, celebrities, and influencers have played a pivotal role in sparking conversations and bringing mental health issues into the public eye. Social media platforms have also amplified these discussions, enabling individuals to share their experiences and stories openly. Add on the pandemicā€™s collective stress and isolation that brought mental health to the forefront of public discourse, which prompted discussions about the need for greater support and resources.

High-profile disclosures by public figures have been another driver thatā€™s helped alleviate the stigma around mental health issues. With public figures, including celebrities, athletes, and politicians, speaking openly about their mental health struggles, people have been able to humanise mental health challenges, showing that anyone can be affected, regardless of social status or success. Similarly, television shows, movies, and documentaries addressing mental health themes have gained popularity, leading to increased understanding and empathy among viewers.

At a workplace level, many companies and organisations are acknowledging the significance of mental health at the workplace.

Initiatives like employee assistance programs, mental health days, and stress management workshops are becoming more prevalent, fostering a culture of support and well-being. This has been made possible alongside an increased demand for mental health services; which consequently, has led to a push towards improving access to mental health care at work, including teletherapy options, community-based resources, and reduced financial barriers.

The increasing popularity of hybrid remote work settings post the Covid-19 pandemic is one resulting example of this interest companies have had in expanding their offering when it comes to supporting their employeesā€™ mental health.

2. Advancements in Technology

Weā€™ve seen massive development in AI and VR/AR in the last few years. Solutions in Mental HealthTech that previously would have only been a figment of the imagination are now fully possible thanks to the level at which weā€™re innovating in AI and VR/AR ā€” beyond their application specifically in Mental HealthTech.

Here are some specific examples in VR/AR that may give you an insight into how development outside Mental HealthTech has pushed development within:

šŸ‘“ VR/AR Hardware Improvements. Over the past three years, there have been notable improvements in hardware, such as more powerful and affordable headsets with higher resolutions and better tracking capabilities.

šŸ–ļø Advancements in Hand Tracking and Input. There have been notable advancements in hand tracking and input methods, making VR experiences more intuitive and natural. Hand tracking allows users to interact with virtual environments using their hands without the need for controllers.

šŸ¤– Integration with AI and IoT. VR/AR has been integrated with AI and the Internet of Things (IoT) to create more immersive and interactive experiences. This integration has led to the development of smart AR glasses and personalised virtual experiences.

šŸ” Growing Adoption in Enterprise and Training. VR/AR has gained significant traction in the enterprise and training sectors. Businesses have been leveraging VR/AR for employee training, simulation, and remote collaboration, resulting in increased efficiency and cost savings. Industries such as healthcare, manufacturing, and education have adopted VR/AR solutions to enhance their training programs.

šŸ”¢ Expansion of AR Applications. AR has seen notable advancements in mobile applications, with more AR-enabled apps being developed for smartphones and tablets. AR applications have been utilised for gaming, retail experiences, marketing campaigns, and navigation, enhancing user experiences in various contexts.

šŸ§± Mental HealthTech ā€” Whatā€™s Next?

Youā€™ve reached this point of the article and youā€™re thinking: so whatā€™s next? Itā€™s all jolly and good that weā€™ve come to a point in society where weā€™re somewhat moving forward with mental health acceptanceā€¦ But what does the future hold for these companies that grew massively during the Covid-19 pandemic to address a spike in mental health issues? What more is there to develop in Mental HealthTech? Letā€™s talk about the opportunities and investment prospects as well as the risks and challenges in Mental HealthTech.

Opportunities & Investment Prospects

There are a variety of opportunities and investment prospects when it comes to Mental HealthTech:

šŸ‘¶ Early-Stage Startups. Investing in early-stage Mental HealthTech startups offers the opportunity to identify innovative solutions with high growth potential. These companies often possess agility, flexibility, and a deep understanding of user needs, which are crucial in a rapidly evolving market. Some key examples of early-stage startups to keep an eye out for in the space are Upheal, Abi Global Health, and MediMusic.

Next up in the Mental HealthTech space ā€” Upheal, Abi Global Health, and Medimusic

šŸ¤ Cross-Platform Integration. Startups that focus on seamless integration between Mental HealthTech platforms, wearables, and AI-driven analytics offer a compelling value proposition. These integrated solutions can provide comprehensive mental health support, and enhance user engagement & retention. As such, it is only a strength to invest in startups that do cross-platform integration as a part of their offering.

šŸ¤« Data Privacy and Security. Companies prioritising robust data privacy and security measures will gain a competitive advantage in an industry where user trust is paramount. Investing in startups that implement stringent privacy protocols will mitigate potential risks and regulatory challenges.

šŸŖ” Partnerships with Healthcare Providers. Startups that forge partnerships with established healthcare providers can significantly expand their market reach and credibility. Collaborating with hospitals, clinics, and insurers may expedite adoption and reimbursement of Mental HealthTech solutions. Investing in startups that are made of teams with robust connections to the medical spaces in the countries they hope to launch could be a pursuable investment strategy.

šŸŒ Regional, Country-Specific Solutions. While Mental HealthTech continues to evolve and innovate in Europe/North America, there are large parts of the world that havenā€™t even gotten to destigmatisation and awareness when it comes to mental health issues.

The next huge opportunity for existing Mental HealthTech companies is expanding and creating region/country-specific solutions that adapt to the local context, by proposing compliant offerings to ease towards raising awareness on the issue. If it isnā€™t currently existing companies, itā€™s highly likely in the next 5 years that other regions/countries will start innovating localised Mental HealthTech offerings as the growing mental health crisis doesnā€™t only apply to Europe/North America.

The teletherapy & online counselling needle is already moving forward in Africa ā€” DoctorsLive, Nguvu, and Clafiya

This hypothesis makes even more sense considering the core reasons for which mental health issues have been growing are rather universal (eg. Climate change and global warming, inequality).

Risks and Challenges

There are still, however, risks and challenges that need to be addressed along the way to ensure Mental HealthTech remains a flourishing market:

1. The Regulatory Landscape

The Mental HealthTech sector operates within a complex regulatory environment, and compliance with healthcare regulations poses a challenge for startups.

The European market, for example, can be quite difficult to navigate considering some segments of mental healthcare sits, for some European states, within the public.

Furthermore, coordination between the private and the public can be quite complex in the mental healthcare space as patient data is often a point of contention.

The more successful Mental HealthTech startups collaborate with the public sector to ensure seamless integration of their solution within the frameworks that exist to avoid the complicated issue around regulation ā€” by providing a solution for a particular pain point.

Itā€™s no surprise that more digitised European states tend to be better partners when it comes to Mental HealthTech startups.

Sweden is one such example. The teletherapy app for individuals, Minder, works in close collaboration with the state ā€” as such patients can benefit from the traditional coverage offered publicly by the state through the app, making the individual therapy sessions significantly cheaper. Cheaper costs, of course, then incentivise people to try out therapy ā€” in the comfort of their home.

As shown on their website, Mindler is a part of the Swedish public healthcare system ā€” the costs for users stick with what it would cost them to consult any doctor within the system, whether that be generalists or specialists

However, while Sweden is a prime example of digital adoption, most other European states lag on digitisation.

One such example is Germany, thatā€™s rather well known for its reluctance to digitise its public sector. As illustrated by these examples, investments in companies with a proactive approach to navigating regulatory hurdles will be crucial. And the (target) location of said companies may determine investment decisions as the regulatory landscape differs significantly from country to country.

2. Ethical Concerns

This might be the slight elephant in the room (especially within the European context), but AI-driven Mental HealthTech raises ethical considerations: including potential biases in algorithms and the broader question around the processing of user data.

There will need to be an emphasis placed on investments in startups that prioritise ethical practices ā€” which in turn will hopefully enhance the industryā€™s reputation and foster user trust.

An alleged terrible example of a startup breaking privacy policies is BetterHelp with their UK expansion.

The FTC alleges that BetterHelp shared and monetised usersā€™ health information from 2013 to 2020 raising serious questions around the respect of user data.

3. The ā€œToo-Often-Recurringā€ Question in HealthTech

Thereā€™s also that question that always comes back in HealthTech. How scientifically-backed and medically accurate are these solutions? From misinterpretation of data, lack of rigorous research and evidence, to simple oversight ā€” there can most definitely be reasons for concern when it comes to development in Mental HealthTech, but even more largely, in HealthTech.

Scientific accuracy is a critical factor in the success and sustainability of HealthTech startups ā€” and as such, addressing concerns related to research integrity, data interpretation, regulation, and ethical practices is essential to maintain patient safety, credibility, and public trust.

Only by prioritising evidence-based research, collaborating with experts, and adhering to regulatory standards, will Mental HealthTech startups successfully navigate these challenges and contribute to meaningful advancements in the healthcare industry.

šŸ¤“ To Invest? Or Not to Invest?

While the Mental HealthTech space does have its points of difficulty and some may consider that the hurdles make for a tough reason to invest, it is without a doubt a growing space that shows signs that it will only continue to evolve. As such, while itā€™s high risk, itā€™s a space most worthy to be invested in ā€” as it truly balances impact with growth the way VCs need to satisfy their Limited Partners (LPs).

Weā€™ve seen throughout this Deep Dive that the space is diverse, filled with different ideas tackling the growing crisis that is the mental health one. However, there is one small thing we havenā€™t asked. Are there ways to analyse the market beyond the segments weā€™ve covered? What next, now that weā€™ve seen unicorns?

The answer is there are most definitely some holes in the market that need to be addressed ā€” and are yet to be explored. Weā€™ll see that really soon, with my next Deep Dive, which as a bonus will feature disruptors that are innovating what seems to be an already breakthrough space.

šŸ’œ Thank you for taking the time to read my Deep Dive on the Mental HealthTech space! Again, if youā€™d like to get in touch with me, you can add me/reach out to me on LinkedIn or email me directly. Iā€™m an easy whisper away.

--

--

Soo Min Hong
Included VC

Included VC Cohort Member (Class ā€˜23) | DE&I Inclusive Product