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Seeking Balance in the Hyperactive Mental Health Tech Market

The prevalence of mental and behavioral health conditions has been on the rise in recent decades, further aggravated by the pandemic in the last two years. Social isolation, grief from the loss of loved ones, fear of contracting the virus, and financial worries were all major stress factors that increasingly affected the mental wellbeing of the population, and the resulting statistics are startling: the average share of adults with symptoms of anxiety or depressive disorders jumped from 1 in 10 pre-pandemic levels to 4 in 10 in early 2021. While the pandemic has certainly triggered a rise in mental and behavioral health conditions, it has also illuminated a rising crisis that has been perpetually stigmatized and buried for decades, bringing it to the forefront of conversation, along with a wave of new innovations aiming to alleviate the crisis.

Despite the growing prevalence, roughly half of those with a mental health need go untreated, a complex trend largely driven by inadequate insurance coverage, stigmatization, and lack of access. While Covid-19 initially exacerbated difficulties in access, the swift public emergency declarations that led to the easing of regulations proved a catalyzer for remote models that had previously struggled to gain adoption. However, it is unclear how long these accommodations will continue, particularly those with potential pitfalls, such as the ability to prescribe stimulants to new patients without at least one in-person visit, which has led to certain companies coming under scrutiny in recent months.

The vast array of stakeholders in behavioral and mental healthcare has resulted in a wide and extensive range of solutions, as can be seen in HGP’s two market maps: provider technology which spans care delivery, care documentation, and care evaluation, and consumer and member technology which includes both provider-guided and self-guided solutions. Rising demand for digital health solutions, increased awareness, and loosened regulations have led to a flurry of deal activity across all mental and behavioral health sectors, with average quarterly investment volume increasing 60% from pre-COVID to post-COVID, and average quarterly investment value skyrocketing 300%. Driving these trends are rising valuations, maturing companies raising larger rounds, and eager investors looking to deploy capital into the booming sector.


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