- Dana Olsen
The boom in VC funding for Mental Health startups
Back in 2009, venture capital investors backed seven companies in the mental health space. Jump to this year, and VCs have already completed 30 deals for companies working to help people improve mental health and mindfulness. The latest recipient is Calm, which offers an app for meditation and sleep. The company has announced a $27 million Series A that gives it a post-money valuation of $277 million. Insight Venture Partners led the financing, with participation from Ashton Kutcher's Sound Ventures and One Direction frontman Harry Styles. Founded in 2012, Calm is known for providing content designed to help users suffering from depression, anxiety and insomnia. While some of the company's features are available for free, Calm brings in revenue by charging $60 per year for a subscription to its full suite of meditation and mindfulness products. The subscription fee may be part of the reason why the San Francisco-based company is profitable, with revenue of $22 million last year. Calm certainly isn't the only company offering products and services aimed at improving mental health. Over the last several years, specifically since 2015, venture capital funding in the sector has boomed. This year is on pace to see more than $500 million in venture capital invested in mental health tech, the most in at least the last decade, per the PitchBook Platform. Here's a look at VC investment in the mental health, mindfulness and therapy space, from the start of 2009 until now: The cash has gone into a variety of businesses, including health benefits platforms aimed at employers and tech tools designed to match consumers with mental health practitioners. But the bulk of the deals so far in 2018 are for companies that, like Calm, provide apps and platforms meant to improve users' mental health on a day-to-day basis.
One of those startups is Shine, which raised $5 million from investors including Comcast Ventures and Female Founders Fund in April. Shine provides a free service that sends out daily messages via text or Facebook with advice, positive reinforcement and motivational sayings. With its latest funding, the company is valued at $22.5 million. Another mental health app that's received funding this year is Woebot, which offers a chatbot for emotional support and therapy. In March, the company brought in $8 million at a $38 million valuation. There's also Regroup Therapy, a provider of video therapy services that secured $5.5 million earlier this month. Last year was also big for mental health startups, with nearly $500 million spread across 70 deals in the space. In June 2017, Headspace, perhaps one of the best-known meditation apps on the market, raised $37 million at an estimated valuation of $320 million. A few months later, online therapy provider Talkspace pulled in a $31 million Series C that valued it at $130 million.
