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.
Lyra Health provides behavioral healthcare solutions that include an online telepsychiatry platform with access to a network of therapists and psychiatrists. The company was co-founded in 2015 by David Ebersman (former CFO at Facebook), Bob Kocher, and Bryan Roberts. Lyra Health mainly caters to the B2B market, where it partners with companies (clients include Starbucks, eBay, Amgen, Netapp, Uber, Genentech, ServiceNow, and Apache) to provide employees and their families with easy access to effective mental health care. As of May 2021, Lyra’s network had more than 5,000 clinicians and served 2.2 million members.
Lyra Health covers mental illnesses ranging from mild to severe cases through a wide range of care options including coaching, therapy, psychiatry, and medication. These care options are delivered through self-guided programs, in-person chats, live video chats and even onsite options at employee premises. As for service delivery, the company partners with behavioral health coaches and therapists who can link their practices to Lyra Health’s platform. Users initially sign up and complete a clinical assessment, the platform’s analytical tools then match users with the relevant coaches or therapists. Lyra also conducts a progress check to find out if the user is actually benefiting from care options.
Lyra completed two funding rounds within the first 5 months of 2021, raising USD 187 million in January and USD 200 in May, which brought total funds raised to USD 675 million. The funds will help accelerate Lyra’s global expansion drive and will be invested in developing new solutions for enterprises and mental health providers across 180 countries. The company plans to facilitate this expansion through its recent partnership with international employee assistance program provider ICAS World. Lyra also plans to launch a new, global, digital platform in 2022 that would provide integrated mental healthcare solutions including preventive care, mental health coaching, therapy, meditation, and medication.
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.
Teladoc Health is a leading virtual healthcare provider. The company collaborates with employers (around 40% of Fortune 500 companies and medium and small businesses), more than 300 hospitals both in and outside of the US, more than 40 health plans, and 70 insurers globally. It reported a paid membership base of around 43 million as of March 2020, which is expected to increase to 50 million by the end of 2020, growing 36% YoY.
Teladoc Health expanded into mental health tech when it acquired Betterhelp in January 2015 for a consideration of USD 4 million. Betterhelp, a direct competitor of Talkspace, provides a D2C online platform for users to access services from a network of therapists via text, video, and phone. The acquisition allowed Teladoc Health to tap into the D2C market, complementing its legacy B2B platform.