Mental health technology changes the way we seek mental health support. The stigma surrounding mental health and the high cost of treatments put people off from getting mental health support, eventually suffering from severe mental health issues since mental health professionals fail to make the earliest intervention. With health technology, people can obtain mental support anonymously, access medically sound information, and get connected with mental health professionals immediately.
In recent years, mental health start-ups have received tremendous attention from investors because of their potential to (1) offer a wide range of mental health support choices to product users, (2) reach diverse populations, and (3) offer the product users to get virtual support from medical professionals. With Covid-19 disrupting traditional face-to-face mental health support models, mental health technology and apps can make support access to the general public. Some academics even believe that this pandemic will change the perception of mental health help-seeking, eventually making mental health a daily conversation topic.
In this article, we are going to discuss why mental health matters, the current investment market of mental health start-ups, risks for the mental health technology start-ups, and factors for investors to consider when investing in the mental health start-ups
Why mental health matters?
The mental health impact is not just individual. Poor mental health takes a toll on global productivity. According to the Lancet, 1 billion people in the world are estimated to suffer from mental health issues, The loss of productivity caused by 2 of the most common mental health issues – anxiety and depression is equivalent to USD $ 1 trillion of the global economy. On the whole, it is estimated that mental health issues cost a loss of USD $2 trillion in the global economy. This loss is likely to be increased to USD$ 6 trillion by 2030.
In Hong Kong, the City Mental Health Alliance Hong Kong study indicates that 92% of its study respondents believe that “their industry should believe their industry needs more support dealing with mental health in the workplace”. The survey conducted by another mental health awareness non-governmental organisation in Hong Kong, Mind HK, shows that around half of the respondents “showed symptoms of mild to severe depression”. In the same survey, 41.3% of the respondents “showed symptoms of mild to severe anxiety”.
Addressing mental health from the United Nations Sustainable Development Goals (UN SDGs)
While UN SDG 3 is primarily related to mental health, the Lancet Commission on Global Mental Health and Sustainable Development states that mental health is related to 10 other UN SDG goals below:
An overview of the mental health apps market
According to Deloitte Global, the global spending on mental health apps is expected to be around USD $ 500 million this year. While USD 500 million is only a fraction of the USD $ 1.6 billion health and wellness apps market in 2021, Deloitte Global report authors explain that the mental health apps market is small due to the free and low-cost nature of the apps. The report adds that the growth rate of the mental health apps spending has been impressive from USD $ 203 million (the first ten months of 2019) to $ 269 million (the same period in 2020).
Fact.MR report indicates that Asia is the emerging market for mental health apps. During the forecast period (2022-2032), there will be an estimated 17% compound annual growth rate (CAGR) in India and 5.2 times CAGR in Japan. China is expected to account for 14% of the market share of the mental health apps market. For specific mental issues such as depression, around 54 million in China and 86 million in Southeast Asia suffer from it.
Source: Asia Sports Tech
In Asia, a number of mental health apps have received investment in recent years. Examples included ThoughtFull (Singapore), which received USD $1.1 million in seed funding last year, and another Singaporean company named Intellect. It managed to raise $2.2 million in pre-Series A funding, also in last year.
Are any risks inherent in mental health apps?
Mental health apps provide users with therapies to alleviate symptoms of anxiety and depression and programmes to develop positive emotions through mindfulness and stress reduction. However, mental health apps present risks for impact ventures themselves.
Let’s start with monetisation. With around 20,000 mental apps in the marketplace, impact ventures need to work hard to distinguish their apps from others in the marketplace, eventually encouraging users to be intrinsically motivated to use the app.
The next one is information quality. Given the lack of regulation in the marketplace for mental health apps, impact ventures need to ensure the app provides medically-proven information to app users, especially since they may access the information on their own most of the time. The information quality is dependent on the impact venture’s partners such as higher education institutions.
Data privacy matters. Since mental health apps contain highly sensitive data of users – health information. Information leaking can be fatal for the impact ventures to continue offering the apps in the marketplace.
If I am interested in mental health impact ventures, what should I consider?
If you would like to invest in mental health impact ventures, these are the areas for you to evaluate the impact ventures.
Transparency: to win the hearts and minds of stakeholders, the impact ventures should clearly communicate (1) their method to design the mental health app and (2) data privacy and collection policies – especially the sensitive nature of the apps and the types of user data collected.
Services provided: to create a sustainable income model, the impact ventures should creatively pursue strategies for monetization. These include different tiers of subscription and paid programmes and services for users to receive individualised therapies. A successful mental health app can intrinsically motivate users to check in regularly, thus helping the impact ventures to collect the data for diagnostic research for offering the most effective therapies to users.
User experience: to demonstrate the app values for users seeking alternatives to traditional mental health treatments, the impact ventures should also work on enhancing user experience. According to an article on mHealth, well-designed mental health apps should have a simple user inference since most users have mental health issues such as anxiety and depression, which impair an individual’s cognitive ability. The well-designed apps, the article authors suggest, should aim to reduce the user’s cognitive load through “(I) the use of pictures rather than text; (II) reduced sentence lengths; (III) inclusive, nonclinical language”.
So, are there any options in Hong Kong?
Yes, we would like to introduce Hollo to you. Among all mental health apps, Hollo is unique in the following areas:
Partnership: The University of Hong Kong incubated Hollo. Experts from the University have provided advice to Hollo since it was launched. These experts come from medical behavioral health, psychology, computer science, and entrepreneurship.
Wide public recognition: Hollo has received recognition from Global Microsoft Championship, Cyberport, and Innovation Technology Fund HK. The recognition came with technological and funding support for Hollo.
Innovative model: Hollo uses unique and accessible Behavioral Health AI models. They allow users’ daily behavior patterns and emotional changes to be effectively analyzed for possible mental health issues. Hollo’s model is operated according to the United States’ U.S. Food and Drug Administration digital therapeutic and SaMD regulations.
Seeking: Partners to further develop
Our attention to mental health, magnified by the Covid-19, has presented risks and opportunities for mental health impact ventures. Their success is dependent on excellent stakeholder partners, effective practices in safeguarding personal data, and effectiveness in helping users to obtain information on a timely basis.
If you are interested in Hollo, please contact us.