35 overseas digital mental health business stocks, only 60% directly to consumers

According to the World Health Organization (WHO), 800,000 people die every year from committing suicide every year. One person commits suicide every 40 seconds. Nearly a quarter of people around the world have different levels of mental illness every year.

Mental illness can be divided into "general psychological problems", "serious psychological problems", "neuropathic psychological problems", "neuropathy" and "psychiatric diseases" according to the degree of severity. At present, there are no clear biomarkers between different types of mental illnesses that can be scientifically divided. The decision-making of the disease is usually made by the psychiatrist according to factors such as the length of the patient's disease, the degree of generalization, the cause of the disease, and self-awareness.

Mental disease classification criteria

Note: 1. “Whether the content is generalized” is the main basis for judging the type of mental illness; 2. “Starting deformation” means that the problem has nothing to do with reality and moral conflict; 3. “Severe deformation conflict” refers to hallucinations and delusions.

Among them, the so-called "generalization of content" refers to whether the cause and effect of psychological problems are one-to-one correspondence. For example, if someone is bitten by a snake, they are afraid and not generalized; and "one bite by a snake, ten years of fear of a well rope" is generalization. Common neurasthenia, depression (about 6.9%), obsessive-compulsive disorder, anxiety (about 18.1%), phobia, etc. are neurotic psychological problems, pathological causes mainly involve sociology, psychology Learning factors and treatment generally use cognitive behavioral therapy (CBT), so such mental illness is also called behavioral disorder. Behavioral disorders are highly prevalent among professionals. According to PricewaterhouseCoopers, two-thirds of Indian employees are experiencing anxiety, depression and stress, and this figure is one-third in the UK and one-fifth in the US. .

In recent years, the “integrated economics” that concerns the relationship between personal physical factors and economic behavior has received more attention. Studies have shown that physical factors act on individual psychology and behavior, while the latter directly form economic decisions. In the workplace, poor employee mental state will lead to absenteeism and inefficient attendance, which will cause heavy losses in economic output. The National Alliance for Mental Disorders (NAMI) calls depression "the leading cause of global disability" and "the main cause of disease burden." In April 2016, the WHO released a report that depression and anxiety caused the global economy to lose about $1 trillion annually, and NAMI data showed that this figure was as high as $193 billion in the United States alone.

On the other hand, digital mental health companies have become the new favorite of capital. On July 11, Arterial Network interpreted Rock Health's 2018 H1 Investment and Financing Report. The report pointed out that in the first half of 2018 alone, 15 digital mental health startups across the United States completed financing, totaling $273 million. Among them, the largest financing for the digital therapy company AKILI received $ 55 million in Series C financing. Rock Health even believes that the digital mental health company is favored by capital is a highlight of the H18 investment and financing community in 2018. (Details: Interpretation of Rock Health's 2018 H1 Investment and Financing Report 5 highlights, vertical integration increased, IPO is not optimistic)

Still in the initial stage of development, capital efficient follow-up brings company agglomeration

Recently, the Arterial Network conducted an inventory of 35 overseas digital mental health companies that have completed financing within 5 years, and compiled the following table. We attempt to characterize from different dimensions and identify the underlying logic for the future development of such companies.

List of 35 overseas digital behavioral health companies

Note: 1. The data source is the arterial network database and public data; 2. The inclusion criteria are at least one financing in 2013 and after; 3. The selected company includes at least behavioral health disorder treatment.

time

We took time into consideration from the two dimensions of company establishment and initial financing, and produced the following chart.

Figure 1 35 digital behavioral health company establishment time and initial financing time

We have found that since the beginning of 2000, there have been two peak periods in the establishment of digital mental health companies, in 2012 and 2015, respectively, and the peak of the first financing occurred in 2015. In fact, some companies that have become industry benchmarks often get the first round of financing within one year of establishment. For example, Lyra Health was founded in 2015 and completed the first round of financing in the same year; Quartet was established in 2014 and received financing the following year; Talkspace was established in 2012 and received financing the following year; Calm was established in 2012 and received financing in the following year Wait. Of course, there are no exceptions, such as Akili Interactive Labs, which was established in 2011 and was only financed in 2015.

location

Figure 2 Location distribution of 35 digital behavioral health companies

From the point of view, the number of digital mental health companies in the United States has an absolute advantage in this inventory. This is due to the fact that the United States has the most mature financial market system in the world, and on the other hand, it reflects the market's reaction to the exclusion of US users from routine health programs. The data shows that although almost all employers have purchased EAP for their employees, employees have less than 20% EAP utilization. American employees often do not choose to seek medical care when they feel that they may have mental health problems due to shame, privacy protection, busy work, etc., which just creates space for digital medical care .

Current round

Figure 3 Distribution of current financing rounds of 35 digital behavioral health companies

In terms of financing, more than half of the digital mental health companies surveyed this time are still in the seed round. No digital mental health company investors have exited through IPO, but there are many well-known institutions among investors. For example, Softbank is a continuous investor in Talkspace; Caesar Medical Ventures is involved in Ginger. Io's Series B financing; Akili Interactive Labs' C-round financing was led by Temasek; Lantern was invested by the US BCBS agency UMPC. In addition, digital behavioral health companies may be acquired by industry giants after gaining market recognition. For example, in 2016, Canary Health acquired bLife; in February 2018, BOSE acquired the Sync Project.

Highly specialized to become a new label for digital behavioral health companies, with serious homogenization

Figure 4 Distribution of business models of 35 digital behavioral health companies

More than half of the digital mental health company's products are direct-to-user consumer products, users can download or pay for free in the application store of the smart terminal, and some companies provide services through subscription, such as users can be in Calm according to their needs. Subscribe to the sleep story, the fee rule is $12.99/month, $59.99/year, and $299.99 for permanent use.

Products for the enterprise are mainly provided in the form of corporate employee benefits, which are purchased by the enterprise and used by employees, such as Modern Health, Unmind, Talkspace, Ginger. Io et al.

Relatively speaking, the product market can be relatively small for both the client and the enterprise. However, we have observed that the "2B+2C" products tend to have higher technical content. For example, Happify and Headspace products use artificial intelligence algorithms to pre-process patients' needs.

Application scenario

Figure 5 Distribution of application scenarios of 35 digital behavioral health companies

In terms of application scenarios, neuropsychiatric psychological problems are the main battlefield of digital mental health companies. On the one hand, as mentioned above, the main treatment for neuropsychiatric problems is CBT. The efficacy of CBT has almost no requirements for face-to-face and professional equipment for doctors and patients. It is easy to achieve “online”. The current popular mindfulness, meditation and other methods belong to CBT.

In areas with high levels of mental disorders such as the United States and the United Kingdom, professional medical resources are very tight. In the United States, for example, patients seeking CBT therapists help to make an appointment first, and the fastest visit time often waits until 3 weeks. Digital CBT can make good use of the fragmentation time of doctors and patients to achieve real-time visits.

The application scenario selection reflects the high degree of specialization of overseas digital mental health companies, especially the digital mental health companies in the United States. Some products can even replace psychologists, not just supplementary medical treatment. In the next section we will mention that, according to the business core, Digital Behavior Health provides models such as expert advice, value-added services and ancillary networks. Among them, value-added services reflect the subversion of medical technology by innovative technologies. At present, some digital mental health companies in the United States are practicing subversion. For example, Pear Therapeutics' digital therapy has been approved by the FDA; Akili Interactive Labs' video game is preparing to apply for FDA approval. All of the above products do not need to rely on expert advice in use.

Business core

Figure 6 Distribution of the business core of 35 digital behavioral health companies

In the "Business Core" section, we will discuss the digital business of mental health companies under the APP, Web and other carriers, the internal business organization and form of provision. The business core will directly determine the quality, cost and accessibility of the company's products, which in turn will affect its profitability and development.

In Innovator's Prescription, Christensen defines expert opinion, value-added models, and ancillary networks. Here we use the definition of Krebs to distinguish the business essence of digital behavioral health companies.

Kline believes that the expert opinion-led model mainly transmits value through expert employees. Experts use professional skills to analyze, analyze and solve problems to identify the causes of complex problems and recommend solutions. The diagnosis of general hospitals and specialist clinics is similar to that of expert opinion. The value-added service model refers to the company's conversion of unfinished products into more complete and higher-value finished products, usually charging consumers according to the results of the work process. Companies in the retail, catering, automobile manufacturing, petroleum processing and other industries mainly adopt this model. . In the medical world, many treatments after diagnosis are value-added service models. The auxiliary network is well understood, that is, the supply side and the demand side are connected in series through the Internet to achieve efficient operation.

Specifically, in digital mental health companies, expert opinions refer to experts as the main body of behavioral disorder treatment, digital products are assisted by the side; value-added mode refers to the digital treatment of behavioral disorders without relying on expert experience; The definition of Krebs is no different.

From the chart we see that "expert advice + auxiliary network" is the core of the mainstream digital mental health company business. The scarcity of medical resources and the psychological contradiction of patients are the main reasons for the inefficiency of behavioral disorders. Digital Health Company uses the Internet to allow patients to make reservations and diversions through APPs and web pages to ensure privacy while integrating inventory resources. The technical threshold for this model is low, so a large number of companies are pouring in. However, after analyzing 16 “expert opinions + auxiliary network” digital behavioral health companies, we found that the homogenization of such companies is quite high, the main difference is the non-technical areas such as service areas, linked medical resources and charging methods. Barrier factors are easily defeated in fierce market competition.

As a result, some digital mental health companies have innovated their business cores. Such as the construction of "expert advice + value-added services + auxiliary network" business core, such as Ginger. By collecting the user's smartphone usage habits, io judges the patient's mental state and the type of diagnosis and treatment required in a standardized way, and transmits the information to the appropriate psychologist, which is developed by the psychologist on the recommendation of the artificial intelligence algorithm. Personalized treatment programs form the AI-led, expert-assisted business core. There are also digital mental health companies that bypass experts directly and provide treatment to patients through computer algorithms. The above mentioned Pear Therapeutics falls into this category. In addition, Headspace is also a typical “value-added service”. Patients choose the meditation course preset in the APP according to their own needs. They do not need experts to participate in the whole process, and have good curative effect on non-neurological psychological problems such as anxiety and stress.

However, many mental health experts are skeptical about whether digital products can replace the status of experts in the treatment of behavioral disorders. American psychologist Tanisha Ranger said that although APP can enable patients to receive professional treatment anytime and anywhere, experts are still irreplaceable because the latter can provide personalized understanding and insight based on empathy. Another psychologist, Jean Otto, has the same view. She believes that patients with mental disorders need patients to fully expose their inner fragility, which is the emotion that only real humans can inspire.

In the future, whether the value-added model of digital mental health companies can subvert the expert model remains to be seen.

What are the tricks for a company that has a big break?

As the digital mental health products relying on the value-added model still have high uncertainty in the future, we decided to analyze the three “expert opinions + auxiliary network” products with distinctive heads at the end of this article to try to find out their top level. The attraction of capital.

Quartet

achievement

1. Completion of the C round of financing, with a total financing of 92 million US dollars, ranking first among the 16 “expert opinions + auxiliary network” companies;

2. Quartet has more than 100 employees, most of whom are data experts and engineers;

3, has been in Boston, Seattle, New Orleans, Sacramento, Pittsburgh and other cities, reported satisfaction of 85%. Quartet serves more than 1 million patients, all of whom come from medical and insurance institutions. The contracted member usage rate is 61%, and 75% of psychologists can respond to patients within 36 hours.

4. Quartet is currently working with Double Blue Healthcare Horizon to drive the project to land in New Jersey.

Features

Quartet provides patients with specialist treatment, telemedicine , health management, online CBT, and community services.

Quartet believes that psychological barriers are the cause and aggravation of many physical disorders, and the intrinsic link between the two can better serve patients' overall health. Therefore, Quartet combines behavioral health with primary care, using AI algorithms to screen patients with behavioral disorders from the primary GP's electronic medical record database, and to refer to psychiatrists for general practitioners, patients, and spirits. Data links are established between doctors to ensure the health of patients with both mental and physical functions.

In addition, Quartet's approach from GP to patient is a good way to ensure that patient visits are covered by health care. In 2016, the United States once again introduced the Mental Health and Addiction Equality Act, requiring medical insurance to provide the same insurance coverage as physical therapy to patients receiving psychotherapy, which greatly benefited Quartet. According to statistics, after the promotion of Quaret, the medical expenses for the whole people will be saved by 3% to 4%.

Lyra Health

achievement

1. Completion of Series B financing, financing of US$83.1 million is second only to Quaret, including the investment of Rockrock family venture fund Venrock;

2. Lyra Health brings together more than 2,500 psychologists outside the health insurance system;

3. Lyra Health's customers include eBay, Uber and other well-known companies, and have been loved by 95% of our customers.

Features

Lyra Health's approach to providing medical services is based on employers as an entry point. It captures the mentality that employees are often ashamed to mention their psychological barriers, providing services in the form of corporate benefits, and employees can use them in a confidential manner. Help them understand the type of behavioral health services they need safely and comfortably.

With Lyra Health, employees only need to answer simple questions about their symptoms, severity, treatment options, and specific algorithms to help them match the right treatment, and the entire process is completely confidential. Lyra Health regularly checks the communication between the patient and the therapist and reports to the employer.

Talkspace

achievement

1. Complete the C round of financing with a total financing of US$ 59 million. Among them, each round of financing has the participation of Softbank;

2. Talkspace has 1 million active users and more than 9,000 members of the Delta Tau Delta Brotherhood and works with the Alpha Tau Omega Brotherhood;

3, Talkspace has a star user "shark" Phelps, and get a free promotion of Facebook.

Features

Talkspace is a text-based therapy that allows physicians to communicate with patients via text messages from the time they are asked to the prescription. The prescription drug is another feature of Talkspace. To this end, Talkspace is an independent collaboration between psychiatrists who provide professional medication advice to psychotherapists during treatment. Online prescribing can solve the problem of users solving fewer and more expensive prescription drug purchase channels.

One point analysis

At this point, we can see that, unlike domestic mental health products that focus on online and offline supply forms, competition between overseas mental health products is more like an entry dispute. Among the 35 overseas mental health companies we surveyed, the strong business model is basically iron law. The strong business model is reflected in the diversity and stability of B-end users. Whether it is financing rounds or user scale, Quartet, Talkspace and other companies that cut in from employers, health plans, and medical institutions are more competitive.

In addition, the overseas mental health enterprises also present two obvious characteristics. On the one hand, although they are still not mature in the capital market, the pace of financing is accelerating, and the time spent on the early rounds has been 3 to 5 earlier. In the year, it was shortened to 1-2 years. On the other hand, exploring the use of digital depth instead of artificial. At present, the digital substitution of the initial diagnosis and diversion of mental illness has already achieved a high penetration rate. The next trend is the digital replacement of mental illness treatment. There have been companies that have made breakthroughs in this area, such as Pear Therepeutics and AKILI.