Youth Mental-Health Tech Market Primed to Grow, Telosity Report Finds

  • An uptick in demand for youth mental health services is creating new opportunities in Silicon Valley.
  • New research predicts the market for youth mental-health startups may be worth $26 billion by 2027.
  • The startups Elemy and GoGuardian are early winners, while Akili and Cortica have also raised cash.

Millions of young people in the US live with a mental health diagnosis,according to the CDC and the pandemic has caused more kids to struggle. Silicon Valley has a massive opportunity to come to the rescue.

The slice of the healthtech industry focusing 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 wellness and mental health is now on track to become a $26 billion industry by 2027, the report estimates — thanks to the 64.3 million young people in the US who collectively command $360 billion in disposable income.

The Telocity study considered youth to be people under the age of 18, but noted that young people up to age 24 — the oldest Gen Zers — will also drive demand for mental health services for younger people.

It’s a potential boon for both investors and founders, even as market volatility has made it difficult for scrappy startups to raise fresh capital and has cooled digital-health investing.

Over the past four years, youth mental-health startups have exploded in popularity, riding the coattails 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 concerns.

About one-fifth of children have a mental disorder such as ADHD, autism spectrum disorder, disruptive behavior disorder, or Tourette syndrome, the CDC estimates. Nearly half of the parents polled in a recent National Parents Union study said that their children over the past two years have faced additional mental health challenges and difficulty in school as a result of the pandemic.

And thanks to a longstanding therapist shortage, families seeking traditional care may wait months to see a provider, creating additional opportunities for startups to step in and offer new services.

For youth mental-health startups to find success, it’s important to remember that what works for adults won’t necessarily work for children, the Telosity report said. Founders should also keep in mind that young people are more difficult to engage; 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 focusing on clinician access, improved online experience, emerging technology, and positive skill-building were the top drivers of investments. Other categories driving less investing right now include wellness and self care, engagement and adherence, nonlicensed support services, and assessment.

There have already been some winners emerging 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 raked in $313 million and $200 million, respectively, in funding last year. Akili, which uses video games as assessment tools for mental health disorders, raised $110 million, while autism therapy startup Cortica raised $60 million.

Leave a Comment