For psychological well being startups, happiness is in niches

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Final April, Alex and I reported CB Insights information displaying that enterprise funding into psychological well being startups had dropped sharply in Q1 2022 in comparison with the previous quarter. However within the final couple of weeks, I even have heard about a number of venture-backed offers into the subsector of well being tech. They bought me curious: Through which areas of psychological well being are VC companies nonetheless keen to take a position? Let’s discover. — Anna

Temper swings

The extra the pandemic looked as if it would subside, the much less enterprise capital buyers appeared keen to decide to corporations and sectors that had initially benefited from robust tailwinds when a lot of the world began staying at house. On public markets, the pandemic commerce is over, with former darlings like Peloton and Zoom experiencing whiplash. Equally, we noticed a web decline in non-public funding into telehealth and psychological well being startups.

Market corrections after a interval of hype are a part of the investing sport. But it surely can be arduous to argue that psychological well being wants have decreased. In line with the World Well being Group, incidents of hysteria and melancholy elevated by 25% in the primary 12 months of COVID-19. Simply because we at the moment are hopefully leaving the worst of the pandemic behind us doesn’t imply everyone seems to be all of a sudden feeling higher — which is why just a few current funding rounds within the psychological well being house raised my consideration.

In fact, just a few psychological well being–associated offers are anecdata. And since we’re speaking largely about early-stage offers, this doesn’t imply that the funding decline has been reversed. In mixture, we are going to solely have extra readability as soon as Q2 numbers can be found. However what’s attention-grabbing is that these startups trace at some novel approaches to psychological well being wherein VCs are nonetheless keen to take a position. Or, dare I say, present us the place their thoughts is at.

Not underserved?

VCs would possibly haven’t any headspace left for the subsequent Headspace. The broad-ranging psychological health-focused platform and its most direct competitor, Calm, appear to have captured a lot of the mainstream marketplace for bite-sized mindfulness. However there are nonetheless gaps within the psychological well being market to handle — no less than, some startups suppose so.

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