Mental health tech refers to services that help treat mental health conditions via mobile and/or online platforms. A main function of mental health tech platforms is to connect physicians and practitioners directly to patients without barriers such as a lack of proximity, prohibitive cost, or long wait times in the doctor’s office.
The mental health tech ecosystem is broad and includes telepsychiatry platforms, digital therapeutics, monitoring/measuring tools, and peer to peer apps. Telepsychiatry is at the forefront of the industry, and has been gaining traction with a growing number of users. Monitoring/ measuring tools follow, but the services have yet to see mass adoption. Digital therapeutics (software-based therapeutic interventions given directly to patients for preventing, managing, or treating mental disorders) is an emerging segment with just a few successful product launches, but it shows great potential.
Talkspace: 25% increase in user volume from mid-February to May 2020. 23% YoY increase in app installation reported in September 2020.
Betterhelp: A doubling of users reporting stress and anxiety between Feb and March 2020.
Ginger: 159% increase in usage of its text-based mental health coaching service over pre-pandemic levels. 302% increase in virtual therapy and psychiatry sessions over pre-pandemic levels.
Neuroflow: Expanded customer base 10x to 330,000 registered users by the end of 2020.
Lyra Health: More than doubled membership to 1.5 million users between February and August 2020.
Incumbents in the industry deliver telepsychiatry services as part of their telemedicine services while disruptors specializing in mental health tech have successfully established their foothold in the market mainly due to the increasing number of mental health patients. Most of the disruptors are concentrated in the telepsychiatry segment, given its popularity of facilitating live interaction sessions with psychiatrists as an alternative to in-person doctor visits.
The mental health tech space currently has around 340 startups comprising telepsychiatry platforms, digital therapeutics, monitoring/measuring tools and peer-to-peer apps (the segments focused on in this report). By numbers, monitoring and measuring and telepsychiatry form the bulk of the sector’s startups. In terms of funding, however, digital therapeutics takes the largest share, despite its smaller number of startups. Digital therapeutics’ larger funding share could be explained via its products’ prescription-based nature, which calls for heavy investments before passing stringent regulatory compliance.
Washington-based LifeStance Health is a tech-enabled in-person mental healthcare provider and telepsychiatry platform. The company’s platform offers online assessments, video consultations for individual and group therapy, appointment scheduling, and medication management. These services are also available at LifeStance’s clinics while the company also provides additional in-person services including intensive therapeutic programs, cognitive behavioral therapy, dialectical behavioral therapy, and Transcranial Magnetic Stimulation therapy.
LifeStance Health is one of the largest outpatient mental health platforms in the US by the number of employed clinicians and geographic scale. As of December 2021, the company had a network of more than 4,790 licensed mental health clinicians operating out of 500 centers across 32 states. Additionally, the company had served 570,000 unique patients in 2021.
Funding and financials
The company filed for an initial public offering in May 2021 and began trading on the Nasdaq under the ticker “LFST” in June 2021. The IPO was priced at USD 18.00 per share for 40 million, and LifeStance raised USD 720 million. The funds will be used to open more centers, build out its technology, and repay its outstanding debt. In 2021, LifeStance reported 77% YoY growth in revenue to USD 668 million and an adjusted EBTIDA of USD 49 million. For its 2022 performance guidance, the firm expects to earn revenue between USD 865 million–885 million (an implied growth of 29%, -32% YoY) and an adjusted EBITDA between USD 63 million–67 million (29% growth, -37% YoY).
Monitoring and Measuring Tools:
The incumbents in the mental health tech industry are mainly established telehealth players that have expanded their virtual care scope to cover mental health. Many leading telehealth players have already ventured into the mental health market by acquiring mental health telehealth providers.
No investor data is available