In recent years, venture capital investors (VCs) have turned their attention to the enticing potential of mental health startups.
Namely, teletherapy consultation services and an array of digital mental health platforms are drawing market stakeholders. It’s no surprise why they’re gathering so much attention.
It’s an unfortunate fact that many of the people who need mental health support the most have no way to get it. However, by having direct access to such services through a typical smartphone, countless patients could get the help they need.
Unfortunately, some of the companies entering this space are showing some unnerving trouble in establishing themselves with any success.
A Warning Sign for Mental Health Startups
While startups in mental health are a promising concept, companies with stories like Basis are giving some investors second thoughts.
Their services are offline now, but only nine months ago Basis launched their therapy consultation app and website. The startup raised $3.75 million from multiple investors to provide therapy to users at $35 for 45-minute counseling sessions. However, the company received criticism for its questionable use of unlicensed paraprofessional therapists. To many, putting the guarantee of mental assistance in the hands of amateur advisers sounded like a dangerous practice.
Then last month, Basis shut everything down without warning, and most of its members walked out on the project. CEO Andrew Chapin explained this away by saying that the company is currently changing business models. He didn’t offer much else.
This news is disconcerting to investors, as Basis had everything a startup should need to succeed in today’s market. Furthermore, it leaves the VCs and innovators of other health consultation startups hoping that Basis’ failure isn’t indicative of this budding industry’s future performance.
It’s Not Looking All Bad
While there’s enough trouble in mental health startups to cause alarm, some companies are making encouraging strides.
For instance, Mahmee, the postpartum support service for mothers, set off with a promising start that is turning some heads. After launching its services in 2016, the firm recently received a $3 million investment from celebrities, Serena Williams and Mark Cuban.
It is still a little early to call this startup a full-blown success. But its reputation is growing rapidly. On top of this momentum, the service exclusively uses certified medical professionals to conduct consultations. As such, it avoids the concerns that surrounded Basis.
Hopefully, startups like Mahmee will continue to thrive. Unfortunately, others fail to prove that easy-access healthcare is a viable service. If these startups don’t show reliably positive returns to demonstrate their value soon, VCs will eventually abandon them.