More Americans than ever before are suffering from mental and emotional distress. In the United States, the mental health problem is exacerbated by issues across infrastructure, government and culture. However, because the resources for those living with mental health issues are constrained,[1] startups could have a big impact. In particular, we believe that digital therapeutic approaches offer great promise in overcoming the problems inherent in traditional approaches to mental health and behavioral therapy. Such problems relate to stigma, cost and general inaccessibility of cost-effective treatments for the general population.

We are starting to see new energy behind innovators in the mental health space. Examples include Enlyte (discussed in greater detail below); Talkspace, an online therapy app that connects users with licensed therapists; Calm, a sleep and meditation app; and Feel, a wearable designed to monitor the user’s emotional state.

Each of these companies – whether they aim to provide easy access to mental health professionals, to promote overall mental wellness or to better monitor the user’s mental state – has the potential to be highly impactful as well as profitable. In our view, the time is right to invest in mental health and digital therapeutics. In this paper, we provide an overview of the field of digital therapeutics for mental health, as well as the legal, regulatory and ethical issues that should be considered by entrepreneurs and investors.

The Big Four Mental Health Afflictions: Stress, Anxiety, Addiction, Depression

The mental health crisis costs companies around the world over $1 trillion in lost productivity and increased healthcare insurance premiums annually. The productivity losses are primarily caused by absenteeism, and turnover and replacement costs. In addition, the costs attributable to the family members and loved ones of employees (employee ecosystem) cost employers approximately 250% more in lost productivity than their direct employees. According to a report from the World Health Organization (WHO), 450 million people are currently suffering from mental health disorders leading to illness and disability.[2] The Lancet Commission on mental health predicts that by 2030, mental illness will cost the world USD$16 trillion.[3] If we look at the United States alone, 40.3 million people are affected by the disease of addiction. Twenty percent of U.S. deaths are attributed to addiction to tobacco, alcohol, drugs and other substances.

While many companies have employee assistance programs in place that cover mental health issues for their employees and close family members, there is a strong reluctance among those covered to use the available benefits because of the stigma attached to mental health issues and the fear that the employee’s sensitive personal information may be accessed by the employer. Stigma is the key reason preventing many people who urgently need help from receiving it. In addition, treatment facility capacity is another reason that people are not getting the help they need. There needs to be increased access to evidence-based treatment options for the public. The emerging field of digital therapeutics offers promising solutions.

Next in the series: Risks and Rewards of Digital Therapeutics in Treating Mental Disorders – Part II will discuss digital therapeutics and software as a medial device FDA regulations.

[1] Mental Health America reports: “In states with the lowest workforce, there’s only 1 mental health professional per 1,000 individuals—that includes psychiatrists, psychologists, social workers, counselors and psychiatric nurses combined.”
[2] World Health Organization. Available from:
[3] Mental Illness Will Cost the World $16 USD Trillion by 2030. Available from: