How tech is tackling the mental health pandemic
Mental health is a global concern. Pre-existing problems have been hugely exacerbated by the Covid-19 pandemic, with its unprecedented stretches of social isolation. Recent data has found that international prevalence of depression and anxiety has rocketed by 25%.
As the WHO puts it, “Loneliness, fear of infection, suffering and death for oneself and for loved ones, grief after bereavement and financial worries have also all been cited as stressors leading to anxiety and depression.”
With a problem of such sprawling proportions, it’s no surprise that tech innovators working within the mental health subsector have been seeing significant interest from investors. As our newest Healthtech M&A report discusses, investment in mental health-related tech companies hit more than $5.5 billion in 2021, a rise of 139% from the year before.
One beneficiary of this trend in 2021 was UK-based healthtech company Ieso, which secured $53 million in series B funding in November. Ieso specialises in remote cognitive behavioural therapy (CBT) for depression, anxiety and other prevalent mental health conditions.
CBT is a very proactive treatment approach which equips patients with the skills to identify and alters problematic ways of thinking. Ieso allows its users to connect with real, qualified therapists via online chat. In other words, it works exactly like in-person consultations, but unfolds entirely via text – something which actually benefits many patients who may feel anxious about visiting therapists in their offices.
Ieso has long been offering its services in partnership with the NHS and other healthcare organisations, but the recent injection of funding has allowed the company to expand its use of AI technology. Key to this autonomous functionality is Ieso’s archive of therapist-and-patient transcripts, compiled from the over 460,000 hours of therapy provided so far. These transcripts can be analysed by AI tools to provide clinicians with insights into the severity of patients’ conditions, their probability of dropping out of treatment, and the potential efficacy of different treatment pathways.
Ieso’s ability to mine this rich seam of data clearly played a part in attracting investment. Stephen Bruso, a partner at Morningside which led the funding round, said that “Ieso has built one of the most impressive data assets I have seen in the space with their text therapy data set.”
Another digital mental healthcare company that made the news in 2021 was US-based Ginger. In March, its series E round raised $100 million, and the company went on to merge with leading meditation app firm Headspace to create a new, $3 billion entity, Headspace Health.
The Ginger app provides patients with mental health coaching, psychiatry and other services, right around the clock, both via text chat and live video therapy. Ginger’s partnerships with employers such as Domino’s, Sophora and Delta Air Lines has meant that an impressive 10 million people across the world are able to access the app’s teletherapy services as a work benefit.
The lucrative March 2021 funding round was led by Blackstone, and was the firm’s first foray into digital health care investments. Blackstone’s Ram Jagannath explained that Ginger’s appeal lay in its “unique and scalable value-based model – text-based coaching, therapy and psychiatry all under one roof, for a fixed fee.”
One of the most innovative firms to get a boost in 2021 was Maslife, a UK-based startup which has boldly planted its flag in both the fintech and wellbeing spaces. Securing £3 million in a seed capital raise, Maslife is a banking app which comes with a Mastercard debit card alongside a suite of wellness tools. Users can access yoga and meditation sessions, count their steps and calories, and make positive adaptations for a more serene, mindful lifestyle.
Given the ominous advent of the cost of living crisis, and renewed concerns over how personal finances can impact mental health, Maslife’s holistic approach seems particularly well timed. Founder Kash Amini said that the funding round demonstrated “the belief in our app and shows it’s a solution that people are yearning for. By integrating wellness into a banking platform, Maslife is defining a new category of fintech and all at a touch of a button.”
It’s not just investors who’ve been showing considerable interest in mental health technology firms. Acquirers, too, have been reaching into their deep pockets. In May 2021, digital healthcare provider DarioHealth announced that it would purchase PsyInnovations, provider of therapy platform wayForward. Under the terms of the agreement, Dario agreed to pay $25 million at closing and a future payment of up to $5 million contingent on revenues exceeding a minimum threshold in 2022.
The platform utilises AI screening technology to direct users to the most relevant and useful interventions, such as online CBT and teletherapy through the app. By streamlining the assessment process, wayForward’s algorithm puts users on the right track in a less time consuming and stressful way. Its acquisition by DarioHealth highlighted the latter’s desire to further enter the highly competitive mental healthcare tech space, following its expansion into behavioural health coaching in 2020. In the words of CEO Erez Raphael, “Dario is a strong, flexible, AI-driven platform that allows for new offerings to be seamlessly added to our open architecture.”
As our latest Healthtech report notes, the healthcare delivery process is ripe for monetisation by companies with the wherewithal to address the existing inadequacies in health systems. This is as true when it comes to mental health as it is with physical ailments.
Serial healthtech entrepreneur Dr Andy Richards CBE has noted that “we are in a global mental health crisis. There are simply not enough clinicians to assess and treat the growing number of people who need help.” Here at Hampleton, we expect to see much more M&A activity involving tech developers stepping up to provide instantly accessible solutions that relieve the burden on traditional healthcare channels around the world.