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For mental health startups, happiness is in niches – TechCrunch

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last april, Alex and me reported Data from CB Insights shows that venture investment in mental health startups fell sharply in Q1 2022 compared to the previous quarter. But over the past few weeks, I’ve heard about several venture-backed deals in the health-tech subsector. You got me curious: what areas of mental health are VC firms still willing to invest in? let’s explore — ann

mood swings

As the pandemic seemed to abate, venture capital investors seemed reluctant to invest in companies and sectors that had initially benefited from strong tailwinds as most of the world began to stay at home. In public markets The pandemic trade is overwith former favorites like Peloton and Zoom experience whiplash. Similarly, we saw a net decline in private investment in telemedicine and mental health startups.

Market corrections after a period of hype are part of the investment game. But it would be hard to argue that the need for mental health has decreased. According to that World Health Organization, incidents of anxiety and depression increased by 25% in the first year of COVID-19. Just because we’re now hopefully past the worst of the pandemic doesn’t mean everyone is suddenly feeling better – which is why some recent mental health funding rounds have caught my attention.

Of course, some deals related to mental health are anecdotal. And since we’re mostly talking about early-stage deals, that doesn’t mean the investment decline has been reversed. Overall, we won’t have more clarity until the numbers for the second quarter are available. What is interesting, however, is that these startups point to some novel approaches to mental health that VCs are still willing to invest in. Or, dare I say, show us where your thoughts are.

No longer undersupplied?

VCs may run out of headspace for the next headspace. The diversified mental health-focused platform and its closest competitor Calm appear to have captured most of the mainstream bite-sized mindfulness market. But there are still gaps in the mental health market that need to be filled — at least, that’s what some startups believe.

For mental health startups, happiness is in niches – TechCrunch Source link For mental health startups, happiness is in niches – TechCrunch