Growth in investment
We now live in a time where mental wellness has become a priority for many of us and this is accelerating the rapid growth of the wellness industry. “Defining the Mental Wellness Economy”, a major research study done by The Global Wellness Institute (GWI) in 2020, indicates that the global mental wellness economy is currently worth US$120.8 billion, based on consumer spending in four markets: senses, spaces and sleep, brain-boosting nutraceuticals & botanicals; self-improvement; meditation and mindfulness.
Investors have been making aggressive moves to seize this opportunity. The amount of funds raised in the US has set new records every year since 2016. In 2020 there was US$1.5 billion raised which was 5.5 times the US$275 million invested in 2016.
The number of deals has also risen from 69 in 2016 to 124 in 2019 – a nearly 80% increase. Last year, there were at least seven mental wellness startups that achieved “unicorn” status , with over US$1 billion valuation.
The Mental Wellness App Market Emerges
Financing from VC and private equity firms gave mental wellness apps a big boost. In 2019, there were more than 10,000 wellness apps targeting an estimated 970 million people with mental disorders globally. The mental wellness app market accounted for US$588 Million in 2018 and is projected to generate a revenue of US$3.9 Billion by 2027, with 23.7% CAGR according to PRNewswire Market Research. The Asia Pacific region is expected to grow at the fastest speed during the forecast period (2019-2027) pertaining to the increasing population and growing adoption of Android and iOS platform based solutions.
Large Underserved Asian Market
The awareness of the importance of mental wellness in Asia has spiked. 71% of Asian consumers today associate ‘health’ with ‘mental wellness’. (JWT Well Economy, November 2018). There is a growing percentage of the adult population experiencing diagnosable mental illnesses in any given year. According to the WHO, an estimated 264 million people are affected by depression globally, with about 54 million and 86 million people suffering from depression in China and Southeast Asia respectively. Yet, not many are receiving proper treatment .
Reasons for this include: the cost of face-to-face consultations is relatively high as the cost of off-line treatment is 50% less than direct treatment in China; and, mental illness remains a societal stigma in Asia. A study led by the Institute of Mental Health in 2017 indicated that Asian respondents tended to feel more threatened by mental illness as a mark of shame. It led those who are experiencing mental health issues turning to digital solutions such as mental health apps as it allows easier and more affordable access to mental health care and support anonymously.
Here are the examples of some significant mental wellness platforms in Asia:
1. Am Mindfulness, a meditation app by Singapore-headquartered digital health firm Mobio Interactive which secured US$1.8m seed funding in Sep 2020. It is an award-winning and clinically-validated app that delivers performance enhancement and resilience training as part of a fun and personalised experience.
2. Clara, an AI wellness app created by Hong Kong-based health tech company Neurum Health specifically made for enterprises to foster a healthy lifestyle, offering personalised solutions to help maintain users’ health and quality of life. They have amassed over 100,000 users from some of the top-tier organizations in Hong Kong and have expanded into the APAC market.
3. Ease, the Chengdu-based platform is a localized version of Calm, a US-based service with a US$ 2 billion valuation, that provided initial funding to Ease’s endeavor. Its main idea is to host a rich array of content to foster users’ self-awareness and understanding of mental health.
4. Intellect, a Singapore-based startup that wants to lower barriers to mental health care in Asia has reached more than one million users just six months after launching and they have closed an undisclosed seed round led by Insignia Ventures Partners in December 2020.
With the massive amounts of capital inflows and the rising demand in Asia, there is a prime opportunity for companies to offer solutions to help Asian consumers to address burnout and mental wellness issues. In addition, there is a large need for corporates and HR professionals to start to invest more in their staff and their teams as things have changed and employees are demanding it. Localisation of the solutions and the right Asia market entry strategies will be keys to success.