Insider No. 53: Confronting The Growing Mental Health Crisis
Wellness, Startups, and Mental Health
Burnout, depression, loneliness, and anxiety are on the rise. Worse, stigmas related to mental health and a lack of access to care force many to suffer in silence.
But now, driven in part by the wellness boom and technology startups, mental health is breaking into the mainstream. Is mental health the next frontier of wellness and is Silicon Valley part of the solution? Let’s take a look.
A silent epidemic: confronting the growing mental health crisis.
- Over 40M Americans suffer from mental illness, including depression and anxiety.
- One in five people dealing with mental illness say their needs are going unmet.
- Left unchecked, the mental health crisis could cost the global economy $16T between 2010 and 2030.
Framing Up The Discussion
It’s important to mention that mental illness is complex and universal. Far from a fixed state, mental health ebbs and flows along a spectrum ranging from thriving to coping or struggling to clinically-treated mental illness.
This expansive view and fluid state of mental well-being make diagnosis and treatment difficult. Similarly, because the term mental health can refer to yoga and meditation as well as dementia and schizophrenia, there’s often ambiguity in discussing the subject.
As it pertains to this piece, though, we’ll focus on a more general definition of mental health that includes emotional, psychological, and social well-being.
Underlying societal factors. An increasingly polarized worldview, technology and social media, drug addiction, and lack of economic and employment opportunities are among the numerous contributing factors to a global mental health crisis.
A flawed system. The mental health sector is in critical need of transformation. Most notably, there’s a shocking gap between demand (those in need of care) and supply (access to affordable care). In the US, for instance, more than 46M people report experiencing mental illness each year. Yet, there are only 28K psychiatrists in the US — a number that’s declining.
Individuals who are able to access care will wait an average of 25 days for an appointment. Even then, treatment is often expensive, with in-room therapy costing $150–$400 per session, plus the added cost of medication if necessary. Unsurprisingly, 45% of untreated individuals cite cost as a barrier.
At a time when suicide rates are at an all-time high, 130 individuals die each day from opioid abuse, and one in eight Americans over the age of 12 are taking an antidepressant every day, it’s painfully clear that the current system is ill-equipped to address mental health.
From meditation to artificial intelligence and hardware to telemedicine, mental health is getting a makeover.
Wellness. It’s critical to note that mental health and wellness are not the same. While the Global Wellness Institute claims that “the future is mental wellness”, it goes on to cite wellness spas and retreats, meditation studios, and mystical “New Age-y” solutions like sound baths as evidence of this trend.
- From CBD-infused sparkling water to mystical services like astrology apps and even healing crystals, wellness trends promise to cure us of anxiety and burnout.
Sure, the rise of wellness culture has helped bring awareness to mental well-being. And it’s true that more people are practicing yoga, meditation, and breathwork. But wellness is a luxury, and mental illness can be a matter of life and death. Conflating them is irresponsible and potentially dangerous.
Tech. Like the wellness industry, tech startups are making big promises when it comes to their role in mental health. Also like wellness, there are concerns about the actual impact. But the list of companies entering the space is growing, prompting White Star Capital to dub this the “golden age of mental health tech.”
- In 2018, 230+ mental health startups were funded, with $800M invested in the space.
- The behavioral and mental health software market is expected to reach $4.77B by 2026.
Across the sector, tech startups break out across six categories, including computerized cognitive behavioral therapy, telepsychiatry, consumer tools, applied artificial intelligence, provider tools, and hardware.
Among the more prominent players, Calm and Headspace have built billion-dollar businesses around cognitive behavior therapy. Two Chairs ($21M in funding) uses technology to match patients with therapists at on-site clinics. Meanwhile, Alma ($8M) is creating coworking for therapists. Still others, like Talkspace ($106M) and Lyra Health ($103M), are connecting patients and therapists digitally.
A New Way Forward
Despite obvious challenges, there are some indications that we’re ready to rethink mental health.
Kids these days. Instead of suffering in silence, Gen Z has demonstrated a willingness to discuss mental health more openly, with 72% of Gen Zers saying managing stress and mental health is their most important health and wellness concern.
Perks of the job. Workplace wellness is moving beyond free food and unlimited vacations to include mental health services. The World Health Organization estimates that depression and anxiety accounting for $1T in lost productivity annually, but investing in employee mental wellness yields a fourfold increase in productivity.
High on life. As opinions of what constitutes an “illegal drug” continue to evolve cannabis and psychedelics (like psilocybin and LSD) are moving into the mainstream. Seen as a potential breakthrough in the treatment of depression, anxiety, and a host of other conditions, psychedelics could play a prominent role in the future of mental health care.
Takeaway: from traditional medicine to technology companies and woo-woo wellness to psychedelics, we’re ready to take an any means necessary approach to treat mental illness. As this trend continues, expect to see a new wave of tools and treatment options emerge as more attention and resources are devoted to the mental health space.
🏠 Wellness Co-living Has Arrived
Say hello to Haven Coliving, a wellness-themed, dorm-style, communal living situation for adults. If you’ve ever wondered what a Goop hotel might be like, your daydreams (or nightmares) have been answered.
This Venice Beach complex features four combined houses filled with 96 residents, six to a room. By prioritizing community and a wellness lifestyle, Haven tends to attract millennials who work in “the industry”. As an article in The Los Angeles Times described them, there are yoga instructors, cannabis entrepreneurs, reiki practitioners, and fitness influencers.
- The compound includes a gym, co-working space, yoga studio, rooftop lounge, and outdoor meditation area.
- A full schedule of activities offers sounds baths and full moon circles (whatever that is).
- Meditation cushions, surf boards, healing crystals, and succulents are scattered about.
It is cultish? Sure. But it’s also affordable, starting at $995/month. It’s a concept that has been so well-received that Haven has plans for two more LA outposts by December, ahead of expanding into other high-priced markets. Meanwhile, Treehouse, another LA-based, wellness-inspired co-living development is set to open its doors.
A sign of the times: wellness is omnipresent. Money is tight. And loneliness is on the rise. So yeah, it only makes sense that a cost-saving, dorm-style, wellness-focused apartment would be appealing. From Equinox Hotels to The Assemblage and Life Time Living, wellness is redefining how we live, and Haven is simply another take on that trend.
💸 For Sale
High-intensity fitness concept Barry’s Bootcamp is reported to be exploring strategic options including a sale. According to Bloomberg, the company has already interviewed advisors to participate in a sale process that could begin early next year.
- The deal could see Barry’s valued at more than $700M.
- Barry’s has 70 studios open or in development across the US and internationally.
- Barry’s is majority-owned by North Castle Partners, a private equity firm with investments in the fitness space including SLT, Brooklyn Boulders, Crunch Fitness, Equinox, and others.
For context: boutique fitness is booming, and Barry’s is among the leaders in the space. But, whether it’s concerns related to oversaturation, a looming recession, the emergence of connected/on-demand fitness, or, conversely, M&A undertaken in pursuit of growth, consolidation is a topic of conversation among operators and investors alike.
Punchline: expect to see more blockbuster deals that will shake up the fitness landscape.
📰 News & Notes
- The Wild West of wellness influencers.
- Vending machines are getting healthier.
- Dosist is building “a cannabis brand around wellness”.
- Two former MillerCoors execs launch Heywell, sparking wellness water.
- Under Armour is under investigation by the SEC and the Justice Department.
- 60% of consumers first try Beyond Meat or Impossible Burger at a restaurant.
💰 Money Moves
- Google parent Alphabet Inc. is buying Fitbit for $2.1B.
- Mirror raised $34M in funding for its interactive LED screen and streaming content, bringing total funding to $72M. Of note, lululemon invested in the round, launching themselves into the connected fitness conversation.
- Peloton quietly acquired Gossamer Engineering, a Silicon Valley engineering firm that has designed devices for Google and Facebook. Terms of the deal were not disclosed, but it appears to be an acqui-hire meant to bolster engineering talent. In this case, 16 people, including mechanical and electrical engineers, from Gossamer joined the Peloton team.
- ASICS acquired leading race registration platform Race Roster for $28M.
- Medopad, an AI-powered biomarker tracking startup, raised $25M in Series B funding led by Bayer.
- Mooala, a maker of organic, dairy-free beverages and creamers, secured $8.3M in Series A financing led by Sweat Equities, LLC.
- Boulevard, a back-office management software for salons and spas, raised $11M in Series A funding led by Index Ventures and Bonfire Ventures.
- Healthify, a digital healthcare startup addressing the social determinants of health, raised $16M in Series B funding led by SV Health Investors and BlueCross BlueShield Venture Partners.
- WTS International, a wellness-focused management and consulting firm, was acquired by CI Capital Partners. Terms were not disclosed.