Zoe Chew

June 14, 2022

Mental Health: Opportunities & Monetization

⭐️ Premium Post

Issue #16

Decentralize access to mental healthcare

As a consumer, getting the help you need to overcome stress, anxiety, depression, and bipolar disorder is easier than ever before–thanks to telehealth platforms. We can find online therapists using BetterHelp, get depression medicines delivered through Ro Mind, video chat with psychiatrists using Talkiatry, or find peer support via Togetherall.

Today, new startups are tackling mental health issues through (1) unbundling of healthcare, (2) unlocking accessibility and affordability, (3) building an integrated mental healthcare ecosystem, and (4) enterprisation of consumer services.

We’ll examine consumer-facing mental health platforms — and reveal exciting opportunities to monetize and win in this space.

1. Key trends

(1) VC funding in the mental health space is exploding:

(2) Mental health startups are scoring mega-rounds (above $100M) in 2021:

(3) Consumer-focused mental health startups are becoming acquirers’ targets:

(4) Millennials are investing in mental health products:

(5) Alternative treatment for depression and anxiety:

  • New players are entering the space by using non-traditional medication to treat mental health conditions.
  • Mindbloom treats anxiety, stress, and depression with science-backed psychedelic medicine and therapy.
  • Field Trip Health offers ketamine-assisted psychotherapy programs to improve anxiety and depression symptoms.
  • Deja & Peak + Valley offers natural, ayurvedic, adaptogenic herbs and mushrooms to reduce stress, boost focus and promote calmness.

(6) Rise of APAC mental health startups:

  • Intellect, a Singapore-based company raised $10 million Series A to scale online therapy programs and mental health benefits across Asia. The platform grew 20 times in revenue YoY in 2021.
  • ThoughtFull, a SEA-based company provides bite-sized mental health coaching programs and serves users across 43 countries. The company has raised $1.1 million in seed funding in 2021.
  • Riliv, an Indonesia-based company connects users with online counselors and psychologists.
  • MindFi, a Singapore-based company raised $2.9 million seed funding by creating culturally-relevant mental wellness programs with equal access for all in Asia.

(7) Solutions for the overlooked demographics:

  • New startups are making mental healthcare more accessible and affordable for students, children, and the elderly.
  • Mantra Health is designed for all university students.
  • Papa provides companionship services for older adults and families.
  • Moshi Kids helps kids to fall asleep 28 min faster by using original audio stories and white noises.

(8) Integrated mental healthcare model is on the rise:

  • New players are building integrated, end-to-end mental care models by partnering with clinicians, specialists, employers, and insurers to provide 360-degree mental wellness solutions.
  • Companies that use a “full-stack approach” typically fulfill patient-provider matching, digital therapeutic, insurance coverage, prescription, and ongoing care management.
  • For example: Talkspace, Talkiatry, Workit Health

2. Market maps, players & competitors database

Find profitable niches in the mental health space, discover competitors and explore ways to differentiate your new ideas:

  • Total 123 company examples across different niches.
  • Total 9 business categories in the mental health space.
  • Company databases with key information: value proposition, website link, funding type, total funding raised, year founded, company size, and location.
  • Filter competitors by categories. Or search by product name, country, funding stage, etc.

👉 View the database here

👉 View the database here

3. What problems do they solve?

(1) Lack of mental healthcare coverage:

  • Many people can’t afford therapy because 70% of mental healthcare providers don’t accept insurance. As a result, paying for therapy is usually expensive, i.e. each therapy session costs $60 — $120 on average.
  • Headway and SonderMind help therapists to take insurance and for patients to get coverage for therapy costs.
  • Talkiatry partners with a wide range of insurance carriers, making psychiatry care more affordable.
  • Amla partners with insurance payers and simplify claim processes for therapists.

(2) Lack of real patient outcomes:

  • Pharmaceutical solutions typically suppress the symptom rather than treat the root cause. Antidepressants also cause withdrawal symptoms and long-term side effects.
  • Psychedelic treatment is four times more effective than traditional antidepressants.
  • Nue Life Health and Journey Clinical solve this by using Ketamine-assisted psychotherapy.
  • Compass pathway solves this by using psilocybin therapy found in medicinal mushrooms.

(3) Children’s mental health crisis:

  • One out of six children who have mental health problems are not getting the treatment they need.
  • Little Otter solves this by offering personalized assessments, pediatric expertise, and parenting specialists.
  • Mightier solves this by developing video game programs to help children with emotional regulation.
  • Healios solves this by providing quality access, clinicians, and a platform to help children with autism and ADHD.

(4) Destigmatization:

  • Social stigmas and taboos surrounding sexual health and maternal depression are creating barriers for people to seek mental health support.
  • Mojo destigmatized men’s sexual health by offering professional psychosexual therapists and online courses to tackle erectile dysfunction.
  • Canopie destigmatized maternal mental health by using cognitive behavioral therapy and personalized online programs.

(5) Addressing the underserved:

(6) Unequal access:

  • Most mental health platforms are flourishing in places like the United States and Europe. Many developing countries have yet to reach the same level of accessibility.
  • ThoughtFull solves this through localization of mental health in Asia, i.e. native language offerings (English, Bahasa Malaysia, Bahasa Indonesia, Mandarin, and Cantonese), diverse representation of coaches, and an integrated healthcare system.

(7) Mismatch of patients and providers:

  • Up to 79% of antidepressants are prescribed by primary care providers rather than psychiatrists who are specialized in mental illness treatment.
  • Hospitals don’t provide enough therapy/psychiatry services due to a severe shortage of therapists.
  • Brave Health uses data-driven, evidence-based assessment to match users to the right providers and treatment.
  • BetterHelp and DoMental match therapists with patients through virtual platforms.

4. Business models & monetization

(1) Content productization:

  • Most common in self-care meditation apps that focus on non-treatment use cases, i.e. stress, sleep, relaxation, and breathing.
  • Companies can package text, audio, video, or user-generated content and turn them into paid content.
  • Productization of mental health content includes: original or third-party sound libraries, guided meditation, relaxation music, breathing exercises, white noises, educational resources, live events, private discussions, and communities.
  • Headspace costs $69.99 per year (general); $9.99 per year (Student Plan) and $99 per year (Family Plan) to access sleep, meditation, exercise, and focus content.

(2) Multi-sided marketplace:

  • Most common in telemental health or telepsychiatry services like Talkspace, SonderMind, Headway, and Mindstrong that has B2C2B components.
  • Companies match consumers with therapists — and(or) connect with employers, insurance partners, and other stakeholders in the ecosystem to facilitate value exchange.
  • For example, Headway makes free access for users and therapists on the platform but takes a commission from the insurance providers for their policies.

(3) Enterprise model:

  • Most common in platforms that offer mental health services to employees through the employers in the form of employee benefits and health plans.
  • By reaching consumer-facing users (i.e. employees) through organizations as the sales channel, employees can access mental health support at zero cost.
  • Spring Health, a 2 billion dollar company works with global companies and serves 2 million employees worldwide using a comprehensive approach. The company provides counseling for relationships, individuals, pediatric, and family mental health.
  • Ginger collaborates with major companies and monetizes by charging organizations through a per-employee, per-month basis fee for access to its plan.

(4) Direct-to-consumer (D2C):

  • The opposite of the enterprise and marketplace model whereby companies build, market, and sell wellness solutions directly to end consumers, without intermediaries or insurance coverage.
  • The revenue source of the D2C model comes from end consumers paying for the services.
  • Why shifting costs to end-users is better? Companies don’t have to “wait” for insurance companies to provide the best care. As a result, consistent costs and quality control.
  • Ro Mind costs $85/month that includes online assessment for anxiety and depression, customized treatment plans, prescription medication, ongoing check-ins, and self-guided virtual sessions.
  • Cerebral charges users an $85/month subscription for assessments, video/phone appointments with therapists, ongoing counseling, and medication delivery.

5. What are the next big things?

(1) Biomarker mental health hardware:

  • Wearables are going beyond measuring heart rate, stress, and breathing data.
  • In fact, wearables are starting to monitor and interpret neurological (brain waves) and behavioral data (voice, speech, interaction).
  • Solutions that look like “portable mental health labs” will become a new category.
  • Feel’s emotional sensor wristband can detect anxiety and depression–and then provide personalized advice, tools, exercises, and online therapy sessions.
  • Mindstrong analyzes the way you use the smartphone and turns them into objective measures of brain function.

(2) API-driven mental healthcare:

  • The global healthcare API market is estimated to reach USD 351.68 million by 2028.
  • Solutions that provide better data flow across the mental healthcare ecosystem will increase workflow productivity and fill the gap for “low code” automation.
  • Use cases include: (1) integrate wearable data and share with practitioners for precise treatment (2) help clinicians streamline appointments, payments, and medical records (3) help insurance providers work with businesses.
  • Kintsugi’s voice biomarker API provides practitioners with real-time patients’ mental health scoring and integrates across clinical call centers, telehealth platforms, and remote patient monitoring apps.

(3) The future of mental health treatment is “no pills”:

  • Treatment for clinical mental illness is shifting from pharmaceutical to psychological-based or non-traditional solutions.
  • More companies will offer cognitive behavioral therapy (CBT), ayurvedic, acupuncture, psychedelic, and holistic treatment that eliminates the root cause rather than suppressing the symptom.
  • Meru Health’s holistic approach focuses on the mind, body, sleep, nutrition, and physical biomarker, rather than just talk therapy.
  • Mindbloom and Field Trip Health uses psychedelic treatment.

(4) Decentralized clinic model:

  • Consumer adoption in telehealth has increased 35x since COVID-19, signaling the demand for accessible virtual care, assessment, and treatment.
  • More solutions are needed to help clinicians “decentralize” their practices, and bypass dependency on authorities, protocols, institutions, and intermediaries.
  • Use cases include: (1) prescription administration (2) clinical assessment (3) data verification (4) insurance claim.
  • Journey takes care of the pharmacology side and allows psychotherapists to offer legal ketamine therapy treatments.

(5) Adoption of AI & ML in mental health will rise:

  • Use cases include: (1) increase precision in diagnosis and treatment (2) reduce therapists’ workload (3) personalized treatment.
  • Spring Health uses machine learning (ML) to assess and match individuals to the right care, i.e. coaching, meditation, therapy, or medication.
  • Ginger uses natural language processing (NLP) to understand the context of coaching conversations for personalized support and risk-detection algorithms to identify members when they are at risk of suicide.
  • Clarigent Health uses AI and machine learning (ML) to detect mental health conditions and inform clinicians with diagnosis and treatment decisions.

(6) The future of self-care is community-based:

  • Self-care is one of the prevention tools for mental health diseases.
  • Top meditation apps attracted $195 million in revenue in 2019. The demand for “self-guided” mental health will continue to grow.
  • Solutions that provide accountability, authenticity, human connection, and social networking on top of self-care content will create a branding moat and platform stickiness.
  • One category to look at is the cohort-based mental health community. Coa offers 8-week emotional fitness classes, led by therapists. Marigold is a peer-based, supportive community.

(7) Verticalization in mental health:

  • Companies that are building around a specific niche or addressing specific customer needs will continue to pop up in this space.
  • For example, mental health support for addiction (ALAViDA), smoking cessation (Quit Genius), and career-focused (Fishbowl).
  • Other niche categories to look at: mental health for parents-founders, leaders and executives, single moms, athletes, former convicts, etc.

(8) Adjacent product category will rise:

  • The increased demand for virtual mental healthcare also creates more new problems to be solved.
  • For example: where to find, compare and recommend the best therapists, psychiatrists, insurance coverage, and treatment plans.
  • Solutions that look like The Zebra for mental health plans, Trustpilot for therapists, and SaaS for clinicians to scale their practices (i.e. provider tools, monetization tools, automation, digital storefront) will emerge.