Home Youth service Venture capital investment in youth mental health startups has skyrocketed 1,376% over the past 4 years. Why it’s not too late to join the fray

Venture capital investment in youth mental health startups has skyrocketed 1,376% over the past 4 years. Why it’s not too late to join the fray

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As the youth mental health crisis deepens, money is flowing to providers offering to meet burgeoning needs.

Venture capital investment in youth mental health and well-being grew 1,376% in just four years, reaching $871 million in 2021, from $59 million in 2018. is according to a new report of Redwood City, Calif.-based Telosity, a fund from investment services advisory firm Vinaj Ventures, which focuses on mental health startups.

Despite increased investment, there are still shortages of youth mental health professionals and services in general. The terms point to an additional opportunity for entrepreneurs looking to build businesses that can help young people.

The report cites that clinical depression among 12 to 17 year olds increased by 52% between 2005 and 2007. Even more, one in six young people aged 6 to 17 suffer from some type of mental illness. There has been a need for adolescent mental health services for years, says Telosity founder and CEO Anish Srivastava, but “the pandemic has definitely exacerbated this problem.”

The pandemic has also helped spur an evolution in mental wellness treatments. Many opportunities for growth lie in thinking about individuals more holistically, as well as sleep, nutrition, fitness and wellness as a whole, adds Srivastava.

Namely, the youth mental health market is expected to reach $26 billion by 2027, according to the report, which tracks more than 850 mental health startups.

According to data from Telosity, two areas that garnered the most investment over the past two years were clinician access and better online experiences. Meanwhile, unlicensed support services and wellness and personal care are less crowded markets.

Of course, space startups face a number of challenges, from insurance reimbursement to patient retention and high costs associated with customer acquisition. And there are also a number of legal and regulatory considerations to juggle. When working with minors, for example, contractors should be aware of the Children’s Online Privacy Protection Act, which is a law intended to protect the privacy of children under the age of 13.

Srivastava adds that the most successful startups in the youth mental health industry are those that can demonstrate the effectiveness of their product or service to make the case for their solution. In other words, have the data to support your claim. “One of the things we try to filter is who [companies] have very clear results and can show either clinical effectiveness and can provide evidence that their solution actually works instead of being theoretical and offering a solution that they believe will work, says- he.