State of The Sector: When Mental Health Goes Digital, Q3 2021

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State of The Sector: When Mental Health Goes Digital, Q3 2021

Guess what, the world around us is still seemingly, metaphorically, realistically, and more than surely, on fire. So many things are out of balance and out of sync that we can no longer effectively sweep it all under the rug. We continue to reach, to cling, and to search deep into our individual and collective pasts for the “old normal” because maybe we secretly FEAR what the new normal will bring, will mean, will change, and, of what we ultimately will be or become.

Honestly, I am not sure if I can believe any longer that the pandemic is the biggest thing threatening our species, our humanity, and our homes.  I instead believe that it is FEAR on so many levels, perpetuated by so many things, across so many spectrums of our lives that is the biggest danger to us all.

Recently I was driving along a highway near my home and saw a digital sign flash words for only a few moments across its screen.  Those words have stuck with me.

It was that FEAR has two meanings:

Forget Everything And Run

Or

Face Everything And Rise

We have been running from so many things individually and collectively for so long, perpetuating cycle after cycle that never seem to close. I think it’s time to embrace change so we can learn, adapt, and grow. I FEAR (there’s that word again) that it is slowly becoming our only path forward through the many hazards that surround us all. Whether we want to admit it or not, we are all being traumatized by the perils around us. This vicarious trauma is not only being experienced at arm’s length but also something we are all experiencing firsthand. Whether we want to admit it or not, that trauma is rooted in some form of fear.

Letting go of FEAR(s) means embracing change, the truth being that it is the only true constant in all our lives and collective humanities. Up until now many of us have held fast clinging to the many threads of the fabric of our individual and collective pasts and presents, fearing change, but it is time to learn to just flow and grow.

Change is a thing of pure beauty that should be embraced–especially if we make sure that the change ushers in many things of splendor and balance.

After the last few years, I totally understand the reluctance and hesitance regarding change and the over-reliance on our pasts to guide us, but this can no longer be our future.  Otherwise we will all be things of the past.

Q2/3 State of the Digital Behavioral Health Sector:

THE ECONOMY

United States

According to Daniel Bachman of Deloitte even though we have suffered a steep decline in production and income, a historic jump in the unemployment rate, and the trauma of a completely different type of shock that required substantial changes in behavior, the American economy might actually return even stronger.

This more-than-promising outlook is being forecasted on projections that US GDP is likely to rise above the level expected prior to the pandemic. There are many reasons why the economy is poised to grow, which Deloitte mentions as:

  • Business finances are healthy
  • Households are sitting on larger piles of savings and have taken on less debt
  • The pandemic accelerated productivity trends, particularly in telecommuting and e-commerce
  • Government spending and relief bills will continue to support growth

Deloitte goes on to say that we should all remember that the long-term trajectory looks pretty good right now. In the short term it is highly possible that we will see temporary setbacks, encounter potholes and it will most likely be a bumpy ride, but things will smooth out eventually.

Globally

Jumping over to the global economy we are hearing and seeing much of the same. SPGlobal.com states that Q4/2021 numbers came in almost universally above their forecast across the globe and as a result raised their estimate for global GDP growth by 50 basis points. S&P Global expects:

  • The eurozone economy to recover its pre-crisis levels of activity by first-quarter 2022 and revised their forecast for eurozone GDP growth to 4.2% for 2020 and 4.4% for 2022
  • The Asia-Pacific economy forecast was upgraded by S&P Global to 7.3% for 2021 from 6.8% previously.

In a nutshell, things are looking good long-term and forecasts are being updated to reflect this but the short term, globally, is going to be a bit of a bumpy ride, so buckle-up.

Health Tech Funding Overview Q2/3 2021:

According to Rockhealth.com, “H1 2021 secured $14.7B in digital health funding, already surpassing all of 2020’s funding. The half closed with 372 deals and an average deal size of $39.6M, spearheaded by 48 mega deals which accounted for 59% of total H1 2021 funding. Public exit activity ballooned with 11 closed IPOs and SPACs, with another 11 SPACs expected to close in 2021.”

What’s even better than that is that by the six-month mark, 2021 funding has already surpassed the total of overall funding. This means that funding, deals, deal size, acquisitions and public exits are all up. The two sectors raking in the most money are:

  • Biopharma/device R&D ($2.7B)
  • On-demand healthcare services ($2.6B)

This shouldn’t be a surprise as these are the sectors that have been leading the way throughout the entire last 1.5 years and some change.

Behavioral Health Funding Review for Q2/3 2021:

Funding in the mental health tech sector reached a record high of $1.3 billion so far in 2021 and interest in mental health has never been higher.

Rockhealth.com cites mental health as one of the top-funded clinical indications, while funding for startups helping to manage substance use disorders  rose steadily as well.  Ongoing investment in mental health and substance use disorders tracks the long-held belief that digital health helps to break down stigma and improve access to behavioral health support.

Some notable successful rounds raised according to Mobihealthnews so far are:

  • Lyra Health raised $200 million
  • Vida Health raised $110 million in their Series D
  • Unmind raised $47 million in their Series B
  • Sesame raised $24 million
  • Naluri raised $5 million in their Series A
  • Mantra Health raised $2 million in Seed funding

Psychedelic based therapeutic companies in the behavioral health sector also saw some notable raises:

  • TRIPP raised $11 million in their Series A
  • Nue Life Health raised $3.3 in their Seed funding

CBInsights also mentions several Virtual Substance Abuse Provider companies that raised successful rounds:

  • Bicycle Health raised $27 million
  • Eleanor Health raised $20 million
  • Ophelia raised $15 million
  • PursueCare raised $11 million

CBInsights goes on to mention that Cerebral became a mental health unicorn with $162 million in funding and a $1.2 billion dollar valuation. Other mental health unicorns on the list in the space are:

  • Talkspace at a $1.4 billion dollar valuation
  • Calm at a $2 billion dollar valuation
  • Ginger at a $1.1 billion dollar valuation
  • Modern Health at a $1.17 billion dollar valuation

Digital Health M&A and IPO Activity:

This year so far has seen a record number of M&A deals with 136 digital health transactions compared to 83 during the same time last year.

Fiercehealth fires off a list of the most notable transactions thus far in 2021 as:

  • Microsoft’s acquisition of Nuance for $19.7 billion
  • Optum’s acquisition of Change Healthcare for $13 billion
  • Datavant’s acquisition of Ciox Health for $7 billion
  • KKR’s acquisition of Therapy Brands for $1.5 billion
  • Boston Scientific’s acquisition of Preventice Solutions for $925 million

Expansion and consolidation are going to continue to be key drivers in the behavioral health technology M&A space as companies look to have a full suite of services are available to treat the whole person’s full healthcare needs.

Funding Directions Can We Expect for the Rest of 2021:

I have to agree with CBInsights overall look at healthcare trends and say that it is looking good for funding and exits across the landscape. This is based on the fact that global healthcare investments rose for the 7th consecutive quarter, the European investment market nearly doubled, M&A activity in the space continues to grow, early-stage deal share is the highest it’s been since Q3/2019 and eleven health tech startups have joined the unicorn club thus far in 2021.

WRAPPING IT UP:

As always, remember that selfcare is monumental in everyday life and especially so during this seemingly never-ending global crisis. Taking care of yourself allows you to be healthy enough to help take care of others.

The perspective we take matters more than anything else. FEAR, panic, and anxiety can be contagious in a highly negative manner and can lead far down the rabbit hole.

Remember that how we all continue to respond to this crisis and to each other is of paramount importance. Our perceptions and actions can come from a place of fear or from a place of compassion. If we take care of ourselves, and of each other, a future of closer unity is sure to follow.

Be COMPASSIONATE to yourself and to each other. Lend a hand; text or phone with persons you care about on a daily basis.

Be GRATEFUL for all the healthcare and behavioral healthcare workers on the front lines, for the garbage collectors, the mail delivery service providers, the restaurants keeping the lights on for to-go orders and deliveries, grocery workers, retailers and for everyone else who goes to work every day to keep our global system functioning.

Be KIND and take only what you need. Help others who can’t or shouldn’t go out to get their needs met. We can’t make it through what’s coming if we deplete our resources out of fear, anxiety, and panic.

Be EMPATHETIC. Share how you are truly feeling, let yourself feel outside your emotional bubble, and give others the chance to share with you. There is no time for hate, finger pointing or alienation. Especially not now.

We continually wish each and every human good health and good mental health.

Stay strong, be mindful, be compassionate and caring of each other, but most of all smile, laugh when you can, and remember that…

As We Always Have Been and Always Will Be

 

 

 

 

 

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