With $5 billion of investment in 2021, digital mental health is a startup hotspot.

However, the sheer volume of offerings can make the sector difficult for enterprise customers to navigate, according to industry insiders speaking at the American Telemedicine Association conference Monday.

“Most employers are bombarded with tons of point solutions,” Chris Wasden, chief strategy officer at digital therapeutics developer Happify Health, said.

Other industry stakeholders familiar with the space agree with those sentiments.

But moving forward, digital mental health M&A is poised to streamline offerings to employers and make care paths easier for patients, according to Katie DiPerna, SVP and head of B2B partnerships at mental health provider Headspace Health.

“If you think about it from the buyer’s perspective, the employers or the health plans, there’s so many solutions,” DiPerna said during a panel discussion. “It’s difficult to assess what’s different between all of them.”

As for that M&A action, a new report from KPMG found strategic deals in the behavioral health space grew by 17% in Q1, making it the only subsector where strategic deal volume grew last quarter.

Over the last year, digital mental health, in particular, has seen several major deals, including the $3 billion merger between Ginger and Headspace, Centene’s $2.2 billion acquisition of Magellan Health, and Lifespeak’s $92.5 million acquisition of Wellbeat.

“What you see is companies coming together so that they can provide a full array of offerings into a whole solution that will take you from the digital front door through some further digital therapeutic products,” Wasden said. “And they can step you up to coaching, then to therapy, to a physician, and step your way to a prescription medication.”

Having more point solutions in one spot for the end user may also help services become accessible for the patient, DiPerna said.

“If you think about it, from the member’s perspective, it’s hard enough to access health care. It’s already fragmented,” DiPerna said. “[Mergers and acquisitions are] bringing together a whole spectrum of tools into one easily accessible and engaging platform.”

Consolidation and a fast-paced M&A landscape isn’t all positives, though. Tim Andrews of digital health compliance organization ORCHA warned that too much M&A could lead to unintended consequences.

“What we need to be careful of is that we don’t take the number of products too low, and you lose innovation, and you lose choice and all the rest of it,” Andrews said.

Andrews noted that the reported number of digital health tools on the market is somewhat misleading. IQVIA has previously reported that there are around 350,000 digital health apps on the market.

However, when you take out-of-date apps, duplicates, wellness tools and apps without clinical evidence out of the equation, that number drops to roughly 2,000, according to Andrews. He estimated that mental health tools account for roughly 20% of apps.

“I would counsel against the death of the point care solutions,” Andrews said. “One of the things [point solutions] bring to the equation is agreements that are … focused on very specific problem areas and challenges.”