- Mental health companies may experience further consolidation as valuations fall in a crowded market.
- Startups in the space raised $5.1 billion last year in hundreds of deals.
- Analysts believe that these eight mental health companies could be targets for mergers and acquisitions in the coming year.
The mental health startup market is overdue for consolidation after investors poured money into the space, creating a glut of companies.
In 2021, mental health startups raised $5.1 billion, more than any other health care category, according to Rock Health. The companies raised $1.3 billion in the first half of 2022, led by megarounds like Lyra Health’s $235 million round in January.
But hundreds of mental health startups are now vying for the attention of investors and customers, creating a market that is ripe for consolidation. Also, this year’s volatile market leads valuations dropwhich could present opportunities for bigger players to get startups at a discount.
Mental health is an area of great need for patients. With almost one in five For Americans experiencing mental illness, the services that surround it are the “missing piece of the puzzle” of health care for acquirers in technology, retail and health care services, said Natalie Schibell, vice president and director of research at Forrester. .
“The mental health space is ripe for disruption. That’s the next step for the tech titans, the retail titans and all these other companies: acquire a company that provides teletherapy,” he said.
The behavioral health market has seen several deals this year, such as Calm’s acquisition of Ripple Health Group. in February and Sayana’s acquisition by Headspace Health in January. amazon announced a society with ginger add mental health support to your primary care services.
Insider asked three healthcare analysts which mental health players could be targets for mergers and acquisitions this year. Analysts named eight companies they thought would be in the thick of the action.
