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September 16, 2020

The Rise of Venture Capital Investing in Mental Health

Author Affiliations
  • 1Department of Psychiatry, Columbia University Irving Medical Center, New York, New York
  • 2Department of Child and Adolescent Psychiatry, NYU Langone Health, New York, New York
  • 3Office of Behavioral Health, NYC Health + Hospitals, New York, New York
JAMA Psychiatry. Published online September 16, 2020. doi:10.1001/jamapsychiatry.2020.2847

Mental health care is ripe for innovation. Less than a third of people with mental health disorders receive treatment, and even a smaller proportion receive adequate care.1 The private sector has taken notice of this economic mismatch (high demand with inadequate supply) and is aggressively pursuing mental health and wellness as an investment opportunity. In 2019 alone, venture capital (VC) companies invested a record-breaking $637 million in more than 60 different mental health–oriented companies, which is more than 22.8 times the investment in 2013.2 Calm, a smartphone application focused on audio-guided meditation, reached a milestone valuation of more than $1 billion, making it the first “unicorn” mental health–oriented start-up. This rapid rise in investment in the mental health and wellness space brings new challenges related to defining, quantifying, and assessing products and services that had previously resided within traditional health care. In this Viewpoint, we review the largest VC-backed mental health companies and propose potential concerns and benefits associated with the rise of for-profit start-ups.

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