However, there is good news for founders and investors (who want to see valuations hold or increase, not drop).

While the stock market is highly volatile amid COVID-19, it would be easy to say this will negatively impact early stage funding in the mental health space as capital markets contract broadly. This could be the case in the near term.

Over the medium to long term, we believe the reaction to this situation by the government, the shift in consumer behavior to remote or telehealth visits, and the continuing focus on mental health and wellness while physically isolating ourselves will be mid- and long-term drivers of increased demand and funding for mental health solutions.

In recent weeks, we have seen government efforts to promote telehealth as a solution for overwhelmed doctors’ offices and emergency rooms. These efforts include lifting restrictions (including those involving privacy) on remote care to provide a springboard to telehealth broadly. This positively impacting startups in the mental health space who provide these services but have long been burdened by rules preventing services across state lines, while also removing friction around expanding operations in new geographies.

Some resources we have read lately that discuss these changes are:

What Are Founders Saying About COVID-19?

Here is some recent commentary from founders and CEOs in the mental health space that we gathered in the last two weeks. COVID-19 is driving increased awareness, reduced regulation, and surging demand for cost-effective, accessible mental health solutions.

“Over the past few years, society has been increasingly recognizing the importance of mental health but this crisis is accelerating that dramatically. Our physical health is threatened by the virus but our mental health is under tremendous strain because of the swirling uncertainty, isolation, stress and anxiety.”

Michael Acton Smith, Co-Founder and CEO of Calm

"The COVID-19 pandemic has brought great uncertainty and many challenges to every business. Among these is the disruption it has caused to employees, some who have been deemed essential workers having to go into work, others having to adopt new work from home routines, and, unfortunately, many who are facing furloughs or worse. All employees have faced the added stress and anxiety that this pandemic has brought them and their families, making the need for mental well-being support stronger than ever before."

Alyson Friedensohn, Founder and CEO of Modern Health

“Our healthcare system will be under enormous stress for the foreseeable future due to COVID-19, and with the increased demand — combined with social isolation — anxiety and loneliness are bigger threats than ever. The only way our healthcare infrastructure can feasibly remain effective is to deploy resources to enable remote monitoring, scalable engagement, and dissemination of resources and information. The need is clear, and the demand is even more clear as it has forced our team to work around the clock to launch quickly and efficiently with health systems around the country, now supporting thousands of providers. In just the last few weeks, we have experienced over 15x increase in usage of our platform, including measuring outcomes remotely and using wellness tools and our various coping mechanisms.”

Chris Molaro, Co-Founder and CEO of NeuroFlow

“Since the onset of COVID, demand through MyWellbeing for remote therapy specifically has quadrupled. Our reach (the number of people who have seen our social posts) is up 125% to 1.25 M so far in March. Followers are up 36% since the beginning of this month.”

Alyssa Petersel, LMSW, Founder and CEO of MyWellbeing

“Our surging March enrollment and the halving of dis-enrollment rates to 4.9% have in part been driven by the COVID-19 pandemic. As more states have recently entered the ‘stay at home’ and ‘lock down’ phase of the pandemic, we anticipate continued and sustained improvements in our enrollment metrics.”

Terren Peizer, Chairman and CEO of Catasys (source: press release)

Who Are the Investors in This Space?

In February 2020, we published an article on the Top 100 Investors in Mental Health Startups. At that time we had identified 833 total investors who had invested in the space, and of those, 113 had invested in more than one deal within the space.

During Q1 we saw nearly 30 new investors enter the space bringing our total list to 862 investors as of the end of Q1 with 128 having invested in more than one. This shows us that more investors are coming to the space, and dozens of investors who had “dipped their toe” with one investment have liked what they’ve seen and decided to invest again. We find this to be a very strong indicator of the capital availability around the mental health problem set and increasing momentum for the space.

We’ve decided to publish the entire list of investors as a resource for founders, other investors, and anyone else interested in this space. You can find our full list of 862 investors who have invested in mental health startups here. If you think we missed someone, or we missed you, please let us know by filling out this form and we will amend the list. We hope this is a great resource for founders and investors alike. We will continually update this list as we learn more about the market and as more financing rounds happen.