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COVID-19 not only highlighted the importance of physical health as people worked from home and socially distanced. It also brought mental health more to the fore – especially as loneliness (due to isolation) pervaded the UK. Many reflected on their job happiness and wondered if a change in career was due. Amidst all of this has, in the background, a growing mental health market has been emerging – using digital technologies to reach people in need of help.
In this article, our investment team at Bure Valley Group outlines the broad nature of the mental health market, current trends and opportunities for investors’ portfolios in 2022. We hope you find this content useful. To find out more about our EIS and other investment opportunities, visit our portfolio page here. To enquire regarding our latest projects and funding (for investors and founders, respectively), you can reach us via:
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What is the mental health market?
Mental health is still widely misunderstood in the general public – contributing to confusion about the market assigned to it. Indeed, official references to the term did not appear until 1946 (when the Mental Health Association was founded), and today medical definitions are not universally accepted. The Campbell’s Dictionary of Psychiatry recognises two meanings, for instance: 1/. A way of describing “mental hygiene” and 2/. A state of psychological well being.
In addition to this, differences in culture, religion, education and other factors lead some people to class certain mental conditions as a “mental health” problem – whilst others will not. In parts of Asia, for instance, a cultural emphasis on maintaining emotional self-control can lead to shame and stigma about mental health conditions. Yet today, in 2022, awareness of mental health and the importance of treatment are enabling more people to get help. Moreover, digital innovations are making these services more accessible.
In 2022, the global mental health market is estimated at $500m USD. An annual growth rate of 20% in the coming years is not unreasonable, given that global value grew from $203m in 2019 to $269m ten months later. Admittedly, $500m seems small next to other health markets – such as health and wellness apps, where global market capitalisation stood at $1.6bn in 2021. Yet it is notable given the large number of free/low-cost mental health apps currently exist. This sets these apps up for popularity in the coming years, and opportunities for more monetisation.
Disruption resistance
What is to stop, say, private hospitals – or established mental health centres – from competing with digitally-based mental health app providers? First of all, the latter (broadly speaking) is not trying to replace the former. Indeed, many apps recommend using a professional for conditions that are outside the scope of a purely digital solution (e.g. schizophrenia). Secondly, these apps are resistant to disruption from traditional therapies – partly due to their ease and popularity. If someone is struggling to sleep well, for example, then using an app like Calm to tell a soothing “sleep story” requires far less cost, commitment and inconvenience compared to attending a regular in-person session with a therapist.
A landscape of opportunity
Today, as many as 20,000 mental health apps may exist. Calm and Headspace are two of the most widely used and recognised. These apps – and those like it – focus on offering mindfulness to users (or meditation). Many of these growing companies are also forging partnerships with traditional mental health providers – as well as online chat providers (e.g. Snapchat) – so more people can access professional mental health services via these apps. The scope for growth here is massive. Indeed, over one tenth of the global population is believed to suffer from one or more mental health conditions. With many of these people unable to access a traditional mental health service provider, mindfulness/meditation apps are well-placed to meet this need without too much concern for national borders.
This ideal positioning for growth also benefits from an expected expansion in healthcare IT infrastructure in the coming years (a trend driven highly by COVID-19). With more people able to access a strong internet connection in developing and developed countries – as well as more people using health services mainly/purely online – global awareness and acceptance of apps like Calm, Headspace and Medito is only likely to grow. Not only is the lower cost of digital health more affordable for people – and, therefore, a potential solution to increasing pressure on healthcare budgets – but it is more accessible and can even be more effective.
A therapist may not be necessary to help treat anxiety in certain cases. Instead, a mindfulness app could achieve better results for some people involving less time, personal disclosure and expense. Moreover, governments are becoming more receptive to the benefits of a mentally healthy national workforce. For every $1 invested in scaled-up treatment for depression and anxiety, for example, there is a $4 return in better health and productivity. Again, this suggests that mental health apps are likely to be warmly greeted in the coming years and also strong candidates for large-scale investment.
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