Consumers, Investors Cool on Digital Mental Health Apps

Consumer and investor interest in digital mental health apps may be waning.

Investment into digital behavioral health apps declined by a whopping 60% from Q4 2021 to Q1 2022, CBI Insights reports. Consumers are also turning away from the tech. App downloads have declined by more than 30% since January of 2021, according to apptopia.

But those numbers may not tell the whole story for digital health. While mental health app downloads are sharply on the decline, tele-behavioral health continues to thrive.


During the COVID-19 pandemic, digital mental health apps saw unprecedented growth.

“When they say mental health apps, you have to realize what is included in there: meditation apps, stress apps, sleep apps – there’s a lot that’s included in that category,” Shivan Bhavnani, founder of Global Institute of Mental & Brain Health Investment (GIMBHI), told Behavioral Health Business. “So I think people turned to those things [in COVID-19], especially because providers at that point had not gotten their act together regarding telehealth. It was very hard.”

Bhavnani noted that at the start of the pandemic, many providers didn’t have a telehealth solution set up. This led patients to seek virtual alternatives.


Yet during the pandemic, many of those providers added telehealth capabilities later on.

Today, mental health remains the only specialty where virtual health is on the rise. According to a ZocDoc report, 87% of mental health bookings were virutal in May of 2022, which is up from 85% in 2021.

“I think that is super interesting, that you have a serious decline in mental health app downloads, while at the same time, you have a slight increase, if anything, of percentage of bookings of virtual care that are for mental health,” Bhavnani said. “It seems like people are turning to actual care, to manage any kind of mental illness that they have.”

The bulk of the apps on the market aren’t set up to treat serious mental illness in the same way a provider is able to, Bhavnani explained. This could be one reason that virtual care with a clinician on the other end is still on the rise, while app downloads are declining.

“I would think that telehealth apps would remain pretty high in terms of engagement,” Bhavnani said. “But I think that stress apps, meditation apps, maybe things that are targeting more sub-clinical issues would start to drop, because, while we’re we still are dealing with COVID-19, shelter-in-place measures and a lot of the lockdowns are over, which is basically reducing the problems of social isolation that happened during 2020 and 2021.”

Investor interest on the decline

Consumers aren’t the only ones cooling on digital behavioral health.

In 2021, GIMBHI reported mental, behavioral and brain health startups raised $6.2 billion in funding.

“In general, I think there was some euphoria, especially on the investment front, about mental health,” Bhavnani said. “There was a lot of capital flowing in.”

But he argues that behavioral mental health apps only accounted for a modest percentage of the entire digital health market.

CBI Insights reports that behavioral health startups accounted for 12% of all digital health deals in Q4 2021, but that number dropped to 8% in Q1 of this year.

Bhavnani said that the focus on digital mental health increased as a response to the substantial need coming out of the pandemic. But he noted that “I don’t think [the market] was super inflated.”