As wellness startups drift usually, VC hotspots emerge

Turning away from the general public markets, IPOs, SPACs and Palantir for a second, would you want to speak about startups once more? I’d.

This morning, I pored over enterprise capital funding patterns for wellness-focused startups. Broadly, according to a new report, these startups raised much less cash within the first half of 2020 than they did within the first two quarters of 2019. Deal quantity fell from practically 600 in H1 2019 to simply underneath 500 in H1 2020, and {dollars} invested slipped from $6.1 billion to $4.6 billion in the identical timeframe.

However, if we peer a bit deeper and take a look at the subcategories of wellness startups, attention-grabbing hotspots develop into clear.

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Contained in the sub-categories of wellness startups that CB Insights dug via whereas compiling the dataset, some, like health tech and sleep tech, noticed fewer offers and {dollars} than they did within the first half of 2019. However one explicit varietal is doing very properly this 12 months: mental-health targeted corporations.

The sturdy enterprise outcomes that these startups have recorded in 2020 should not completely as a consequence of a pandemic, a recession and political unrest that’s inflicting extra anguish than typical, although I’d be stunned if these elements didn’t present a tailwind of types.

Stepping again a couple of quarters, there’s a bit extra to the enterprise facet of mental-health startups that I need to unpack.

This morning, let’s remind ourselves about how startups like Calm and Headspace proved that their market was giant and profitable, evaluation the enterprise capital knowledge and see if the sample of sturdy funding within the house is continuous within the present quarter.

We should always see one other unicorn or two out of the group, we reckon, earlier than the eventual tech downturn. So let’s work to grasp the place the class is at this time.

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