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For mental health startups, happiness is in niches – Fullgist

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Final April, Alex and I reported CB Insights information displaying that enterprise funding into psychological well being startups had dropped sharply in Q1 2022 in comparison with the previous quarter. However within the final couple of weeks, I’ve heard about a number of venture-backed offers into the subsector of well being tech. They received me curious: Through which areas of psychological well being are VC companies nonetheless keen to speculate? Let’s discover. — Anna

Temper swings

The extra the pandemic appeared to subside, the much less enterprise capital buyers appeared keen to decide to corporations and sectors that had initially benefited from robust tailwinds when a lot of the world began staying at dwelling. On public markets, the pandemic commerce is over, with former darlings like Peloton and Zoom experiencing whiplash. Equally, we noticed a internet decline in non-public funding into telehealth and psychological well being startups.

Market corrections after a interval of hype are a part of the investing recreation. However it will be arduous to argue that psychological well being wants have decreased. In keeping with the World Health Organization, incidents of tension and despair elevated by 25% within the first yr of COVID-19. Simply because we are actually hopefully leaving the worst of the pandemic behind us doesn’t imply everyone seems to be instantly feeling higher — which is why a couple of latest funding rounds within the psychological well being house raised my consideration.

In fact, a couple of psychological well being–associated offers are anecdata. And since we’re speaking principally about early-stage offers, this doesn’t imply that the funding decline has been reversed. In mixture, we are going to solely have extra readability as soon as Q2 numbers can be found. However what’s fascinating is that these startups trace at some novel approaches to psychological well being through which VCs are nonetheless keen to speculate. Or, dare I say, present us the place their thoughts is at.

Not underserved?

VCs might need no headspace left for the following Headspace. The broad-ranging psychological health-focused platform and its most direct competitor, Calm, appear to have captured a lot of the mainstream marketplace for bite-sized mindfulness. However there are nonetheless gaps within the psychological well being market to deal with — a minimum of, some startups assume so.

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