- A surge in demand for youth mental health services is creating new opportunities in Silicon Valley.
- New research predicts that the market for youth mental health startups may be worth $26 billion by 2027.
- Startups Elemy and GoGuardian are the first winners, while Akili and Cortica have also raised money.
Millions of youth in the US are living with a mental health diagnosis,According to the Centers for Disease Control and Prevention – and the the pandemic has caused more children to struggle. Silicon Valley has a huge opportunity to come to the rescue.
The portion of the health tech industry that focuses on youth mental health has grown fifteenfold in the past four years, according to a new study from Telosity, the arm of Vinaj Ventures that invests exclusively in the space. . Youth mental health and wellness is now on track to become a $26 billion industry by 2027, the report estimates, thanks to the 64.3 million youth in the US who collectively rule $360 billion in disposable income.
The Telocity study considered young people to be those under the age of 18, but noted that young people up to 24 years old, the oldest members of Generation Z, will also drive demand for mental health services for the youngest.
It’s a potential boon to investors and founders alike, even as market volatility has made it difficult for new startups to raise fresh capital and has investment in refrigerated digital health.
In the past four years, youth mental health startups have exploded in popularity, following in the footsteps of the broader mental health tech industry: startups in this category. raised $5.1 billion in 2021$3.3 billion more than those focused on diabetes, primary care, and other adult health issues.
About a fifth of children have a mental disorder such as ADHD, autism spectrum disorder, disruptive behavior disorder or Tourette syndrome, the CDC estimates. Almost half of the parents surveyed in a recent study by the National Union of Parents She said her children over the past two years have faced additional mental health challenges and difficulties in school as a result of the pandemic.
And thanks to a Shortage of long-standing therapists.families seeking traditional care can wait months to see a provider, creating additional opportunities for startups to step in and offer new services.
For youth mental health startups to succeed, it’s important to remember that what works for adults won’t necessarily work for kids, the Telosity report said. Founders should also keep in mind that it is more difficult to engage young people; healthcare providers are clamoring for digital tools that can improve existing care; and parents need resources too.
The Telosity study found that in 2020 and 2021, youth mental health startups that focused on physician access, enhanced online experience, emerging technology and positive skills development were the top drivers of investment . Other categories generating less investment at this time include wellness and self-care, engagement and adherence, unlicensed support services, and assessment.
Some winners have already emerged in the youth mental health market. Elemy, which provides digital autism care, and GoGuardian, which monitors students’ online activity for self-harm risks, are two unicorns valued at $1.15 billion and $1 billion, respectively.
Elemy and GoGuardian raised $313 million and $200 million, respectively, in funding last year. Akili, which uses video games as screening tools for mental health disorders, raised $110 million, while autism therapy company Cortica raised $60 million.
