The news: Rock Health’s Q3 2021 digital health funding report included a ton of data about digital health investments—we’re breaking down two key data findings: The simultaneous rise in mental health funding and slowdown of digital health SPAC deals.
The data: Digital health startup funding slowed down in Q3’21, hitting $6.7 billion from a high of $8.1 billion in Q2—but this year’s investments have already surpassed the collective $20 billion raised during 2020.
What’s next? We predict investors will place their bets on more niche mental health areas—in particular, pediatric telemental health—through the rest of the year, simply due to the high demand of these services.
There’s a dire shortage of pediatric mental health professionals as kids’ US mental health declines during the pandemic—and there are a few digital health startups raising cash to address this gap in care.
Since there aren’t a ton of kids’ digital mental health startups, the handful that do exist are likely to nab attention from investors that want to stake their claim in this underdeveloped but high-demand space:
Other new data: Q3 also saw a slowdown in digital health SPAC deals, likely due to increased regulatory scrutiny.
How we got here: In August, the SEC drafted a report recommending more disclosure rules for SPACs amid an IPO frenzy.
What’s next? A crackdown on SPAC deals could slow down the digital health SPAC frenzy, but the number of digital health SPAC deals likely won’t return to pre-pandemic levels.
While the rate of SPAC deals could decrease, digital health startups likely won’t quit going public via SPAC altogether anytime soon: