Mental Health Tech Investment is Booming
In 2019, early-stage investment company Octopus Ventures conducted a study with some interesting findings. According to the research, investing in technology focused on mental health has boomed to reach a whopping $755 million. According to Octopus, this trend is caused by massive growth in how corporate companies are prioritising mental health in the workplace and how they are increasingly relying on technological solutions to help manage the issues.
The study was done using recent Pitchbook data and shows a close to five-fold increase in mental health technology investments made over the past six years. In 2014 there was only around $155 million invested in this industry in total. A total deal count in the mental health tech sector was tracked and it became apparent that this has more than tripled from around 30 transactions in 2014 to 105 in 2019. The study also showed that funding rounds are getting larger and larger. An average raise in 2014 was only around $860,000 whereby 2019 showed an average raise of around $2.5 million.
An Emerging Market
And yet, mental health continues to be a budding industry in comparison to the digital health sector overall. Approximately $18 billion has been allocated as investments into the digital health industry over the last six years. Only around $2.6 billion of this was raised by digital health companies in the mental wellness industry. This equates to roughly 15%. The report also highlighted that the British mental health tech start-up sector only received around $27.7 million of a total global investment of around $755 million into the industry.
Why These Numbers are so Important
Mental health charity organisation Mind has reported that around one in four people in the United Kingdom will experience mental health problems every year. Even though investments in this field are increasing, the venture capital industry is capable of doing more. There is massive scope for the United Kingdom to become industry leaders in this space and for this reason, Octopus Ventures is already working with companies in their portfolio that are in the mental health technology industry and doing their part to tackle these issues.
The Big Picture
Mental health technology began to boom in 2016 when Big Health announced an $11.7 million funding round. Big Health is already known in the industry for Sleepio, a digital therapy for insomniacs. The stress reduction app Calm recently became a unicorn after initially raising $28.7 million and then adding an additional $91 million to that. Another major investment in digital mental health tools includes a $32 million funding round for Compass Pathways in 2018. The company is an innovative tech firm busy working on various technology projects geared at mental health.
What the Experts Say
CEO of Big Health, Peter Hames, stated that his company is proud to be helping millions of people to achieve improved mental health with their digital therapies Daylight and Sleepio. Hanes believes that investors are increasingly noting the technology that can help medical professionals deal with the mental health crisis and hopes that this trend will continue around the world.