Data suggest an insatiable and growing demand for youth digital mental health services.
The digital mental health sector will reach $26 billion by 2027 and has already seen a 15x rate of growth over the past 4 years, according to a new report by Telosity by Vinaj Ventures.
Vinaj Ventures, the early-stage investment arm of innovation and investment consulting firm Vinaj Ventures, focuses on backing scalable mental health solutions for young people.
The Telosity report positions its predictions for the swift growth in investment opportunities in mental health in the recent past. Venture capital investments in youth mental health companies catapulted from $59 million in 2018 to $871 million in 2021, according to materials provided by Telosity.
“While the youth mental health market is young, the needs are great,” Anish Srivastava, partner at Telosity by Vinaj Ventures, said in a news release. “The need for tech-enabled solutions couldn’t be greater.”
Overall, Telosity estimates that the behavioral health tech investment opportunity will increase to $132.4 billion by 2027.
Telosity received funding support from Pivotal Ventures, a Melinda French Gates company, to produce the report.
But why digital mental health?
Youth mental health has been worsening in the U.S. for years and many digital mental health services point to this as an opportunity and need worth addressing.
From 2005 to 2017, the rate of depression among adolescents increased from 8.7% to 13.2% and increased from 8.1% to 13.2% for young adults, according to one study.
The same study finds that rates of serious psychological distress and suicidality increased by 71% among young adults from 2008 to 2017.
The coronavirus pandemic — which isolated many from their school peers among other challenges — made it much worse.
As many as 17% of adolescents (4.1 million) experienced a major depressive episode within the past year, a steep increase over 2019 results, according to the 2020 National Survey on Drug Use and Health.
The Telosity report states that every $1 invested in prevention and early detection of mental illness addiction yields $2 to $10 in savings in health costs, criminal and juvenile justice costs and low productivity
It also states that the U.S. is facing “the highest reported rates of adolescent sadness to date, and alarming rates of youth struggles with anxiety, stress, depression, loneliness and suicide.”
The youth mental health crisis line Youthline has seen a COVID-19-era boost in engagement.
Tech-focused companies and services can address “digital-native youth” at scale, according to the report.
“Tech is a great leveler, democratizing access to care and allowing much-needed resources to reach a larger population,” Srivastava said.
The report also points to the flood of investment in digital health generally and digital mental health specifically in recent years.
“In 2020, there were no deals >$50M, whereas in 2021, there were 5 deals from 4 companies,” the report states. The report highlights funding rounds by Elemy, GoGuardian, Akili and Cortica.
Other major market trends in greater digital mental health services cited in the report include the overall cost of care, major increases in demand, stigma related to receiving mental health services, a mental health clinician shortage and struggles with finding a “fit” with mental health providers.
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