Mumbai: “A very typical comment that I get is that we know it is in huge demand. We know people are suffering, but we don’t have the conviction that mental health can scale,” said Kanika Agarwal who recently kicked off a funding round for Mind Peers, an on-demand behavioural healthcare platform.
The scale of the problem is not lost on anyone. According to a survey conducted in 2020 by International Labour Organisation, the pandemic has further accentuated the mental health crises, especially among the younger people who have found their education and work to be disrupted, and are probably twice as likely to be affected by depression and anxiety. In 2017, 197.3 million people had mental disorders in India, including 45.7 million with depressive disorders and 44.9 million with anxiety disorders, according to the peer-reviewed medical journal The Lancet.
Despite the magnitude of the problem, risk money has largely eluded mental health startups in India, a sector that receives limited public money. According to data sourced from industry tracker Traxcn, Indian startups in the sector raised $20 million combined between 2016 -2020. On the other hand, risk investors poured in $556 million in the sector in the US in 2020 alone.
The tide is somewhat shifting in 2021 albeit slowly. Funding in the sector as of August 18 jumped five folds compared to last year and stood at $10.74 million, on the back of increased awareness about mental health brought to the forefront the pandemic.
For years, startups in the space that primarily operated on the marketplace model which connects mental health professionals to patients, have failed to scale or give a noteworthy exit. The limited supply of qualified professionals as well as the unwillingness of customers in India to pay for counseling due to stigma associated with admitting that one has a mental health problem have been a key barrier, investors told ET. Further monetisation can be a challenge because mental health issues are hard to identify and label, and easy to dismiss.
“When we are raising money we don’t just have to tell them the problems in the world we also have to tell them why the existing players did not work,” said Aggrawal, 29, who moved to India in 2020 from Singapore after successfully founding and scaling a digital marketing agency. She founded MindPeers in January last year.
“It’s very easy to pay for something like diabetes which is conclusive and quantifiable,” said a VC from India currently evaluating the space, but preferred to stay anonymous. “There’s a natural societal appetite to be dismissive of something like mental health. So I think it’s not the easiest to monetize from the business-to-consumer.”
A few startups that have received seed funding and Series A funding between 2020 and now are addressing investor concerns by leveraging tech and data to scale and monetise in a way that previous startups have failed to.
For instance, Agarwal’s MindPeers has developed a Mind Care Index that helps corporates and individuals measure interpersonal relationships, motivation, and cognition. “There is simply a huge lack of data and digital platforms are now working towards democratising mental healthcare in a way that you can measure things and you can tell people how they are progressing,” she said. The tangible metric helps in attracting employers, one of the three possible payers in the ecosystem.
Preventative health care startups like Breathe Well, although not strictly in the mental health space, is blending patient well-being into their digital therapeutics programme, which combines exercise and meditation to manage and reverse Type 2 Diabetes. “Every level of the programme we have built has certain meditation protocols. We teach Breath coaches meditation and to assess when a person needs psychological intervention,” said founder Rohan Verma, and said that the programme has had about 10,000 paid customers in the last 18 months from pan-India. The startup was recently backed by Accel and Scott Shleifer, Global managing director, Tiger Global.
“Technology play has to come in, to democratises mental health. It is about getting the right help when you really need it, especially in dire circumstances. In the next few years as well the technology will start to play a more and more integral and critical role in,” said Manish Singhal, founding partner of pi Ventures that has funded Google Assistant-backed Wysa, an AI-enabled life coach for mental and emotional wellness.
Vasudha Wadhera, vice president of Elevation Capital, which has backed online counseling and emotional wellness coach YourDost that primarily operates in b2b space, is actively evaluating startups in the sector. She said they are excited by the prospects of startups solving for supply-side by creating peer-led support groups and listening circles. ”We’re quite excited about models that help solve for the top of funnel both on the demand and supply side by a digital source to link up peer to peer models.”
In the US, apart from employers, insurers are key stakeholders that pay for mental health services. While the trend has picked up among employers in India, for insurers the space is still very nascent in India.
“Mental illnesses need to be considered as yet another medical condition, and hence the treatments of mental illness need to be covered by the insurers in exactly the same way other treatments are covered,” said Abhishek Poddar, cofounder of group health insurance startup Plum. “We are increasingly seeing our insurance partners adding mental illness treatments in their standard coverage.”