How Mindbloom’s CEO sees the future of psychedelic mental health

“What was something amazing that happened to you this weekend,” Mindbloom’s CEO Dylan Benyon asked me, less than 30 seconds into our call. His bright eyes and relaxed demeanor radiated a deep peace and presence, paired with what seemed like a genuine care for the other person on the call — something that’s rare in an interview with a CEO. Sure, he was talking with a journalist to further Mindbloom’s mission, but he was modeling something that runs deep in the mental health startup’s DNA: being there for others.

Benyon built Mindbloom after finding deep healing for himself in psychedelic medicine. For him, the journey started a few years ago when he experienced a facilitated MDMA treatment. Apart from wanting more people to experience the radical healing powers of promising medicines that were chased underground as collateral damage to the war on drugs in the 1980s, Benyon has seen the mental health medical machine failing people very close to home.

“Mental health is the number one public health crisis, and depression is the number one cause of disability worldwide. Suicide is the second-leading cause of death for people 18 to 35 and the number three cause of death for people 35 to 55,” Benyon rattled off the statistics, before the words got stuck in his throat. “My sister and my mother became fentanyl overdose statistics last year and the year before. This is deeply personal and meaningful to me. And when you look at the root cause of why we’re losing the fight to the mental health crisis … our existing treatment options just aren’t getting the job done.”

Benyon’s sister and mother both had severe mental illnesses, Benyon said. Navigating the mental health options available to them was harder than finding more accessible relief in self-medicating with fentanyl.

“My family was obliterated by mental illness. My mother was schizophrenic and an addict. My sister was schizophrenic and an addict. For both of them, wee tried the traditional treatments: antidepressants, anti-anxiety meds, anti-psychotics, one-on-one therapy, group therapy, in-patient rehab, out-patient rehab … Unfortunately, none of them worked well enough,” Benyon said. “My mother ended up spending 15 years homeless because we weren’t able to help her. My sister would have been homeless if she wasn’t sheltered by my father. She died of a fentanyl overdose after getting out of rehab last year.”

How Mindbloom’s CEO sees the future of psychedelic mental health by Haje Jan Kamps originally published on TechCrunch

Despite 2022’s headwinds, women’s health startups did better than ever before

It’s been seven months since Roe vs. Wade was overturned, and the dust has barely begun to settle.

Politically, voters have expressed their overwhelming support for a person’s right to access abortion. Grassroots campaigns continue, and technology-wise, innovation in the wider women’s health sector is only gearing up.

But have things improved at all for the sector? Or has the souring of sentiment across the political spectrum only scared investors off? TechCrunch conducted a vibe check to see where this sector stands, and found a prevailing sense of guarded optimism.

For Oriana Papin-Zoghbi, CEO and co-founder of early ovarian cancer detection company AOA, the sector has tons of potential to grow, but raising capital remains a challenge, as some investors still think of it as a “niche market.”

However, things are changing slowly but surely: “Women still comprise the majority of investors who most deeply understand our product, but we are luckily seeing an increase in the general population who are interested in investing,” Papin-Zoghbi told TechCrunch.

She closed a $7 million seed round last year and is now raising a Series A. “We still have a very long way to go in changing opinions about the importance of investing in women’s health. We are not a niche market as 50% of the population.”

Janna Meyrowitz Turner, the founder of Synastry Capital, echoed similar sentiments. She noted that women’s health startups are looking beyond traditional venture capital for funding, turning to avenues such as family offices, corporate venture capital, and crowdfunding. She’s also heard conversations about strategic mergers and joint ventures.

“I foresee capital to healthcare companies increasing in 2023,” she told TechCrunch. “But I’m not as optimistic when it comes to misogyny in the investment and medical fields shifting as quickly as public sentiment has on things like abortion or even health benefits of the female orgasm.”

The funding for women’s healthcare companies doesn’t look all that bad, though. According to PitchBook, such startups raised around $1.16 billion in 2022, less than the $1.41 billion they raised in 2021. The good news is that the $1.16 billion is much closer to $1.41 billion than it is to $496 million, which was the amount women’s health companies raised in 2020, and $476.8 million, the amount raised in 2019. This indicates that investors didn’t revert to pre-pandemic levels and the sector is still trending upward.

In fact, women’s healthcare tech companies, also known as “femtech,” did quite a lot better in 2022 in relation to digital healthcare funding. Even though funding in the digital health sector fell to about $8.6 billion in 2022 from around $16 billion a year earlier, femtech’s share rose substantially from previous years — the sector’s share of digital health funding was 13.26% in 2022, compared to 8.75% in 2021, 7.6% in 2020, and 11.8% in 2019.

Data Visualization by Miranda Halpern, created with Flourish

If anything, there appears to be increased investor interest to continue funding innovation in this sector, despite the economic and political headwinds standing in the way.

Despite 2022’s headwinds, women’s health startups did better than ever before by Dominic-Madori Davis originally published on TechCrunch

Predictions for the longevity industry in 2023

Last year was when we all got the wake-up call about longevity. From major reports published on the impact of longevity by the National Academy of Medicine and McKinsey to every leading newspaper, public discourse highlighted how our global healthcare, financial and housing infrastructure was failing to serve a rapidly growing older adult population.

While this demographic data is not new, from kitchen table talk to Congress, there was a heightened call for urgency and immediate action.

At Primetime, we observed this wake-up call beyond the research and media attention. First, our deal flow of early-stage businesses in the sector increased from 70 in Q4 2021 to 120 in Q4 2022. And, we were one of only three dedicated funds investing in aging and longevity when we launched in 2020, but we are now aware of at least six more agetech funds in formation, in addition to many other existing funds keen to expand their team to cover the sector.

We are very optimistic for 2023 as we see incredible founder momentum, untapped areas to build new businesses and a window to an increasingly tech-accessible, rapidly growing consumer market.

Here are our top predictions for the longevity industry in 2023.

By 2030, the 50-plus market is projected to swell to 132 million people, who are projected to spend an average of $108 billion every year on tech products.

Health span is the new life span

The COVID-19 pandemic had a dramatic impact on older adult behavior with regard to technology usage, penetration of telemedicine and remote health monitoring, early retirement and financial insecurity. Sadly, one of the harshest implications of the pandemic was that life expectancy in the U.S. declined to 77 from 79.

This year will shift the conversation from “life span” to “health span” — how we live healthier for longer.

While telemedicine usage has declined from its peak during the pandemic, the new average is much higher than before the pandemic. We are particularly excited about companies that will accelerate the growth of 100+ primary and specialty-care telemedicine startups by managing their technology, patient payments and reimbursement, as well as provider acquisition and certification.

In an effort to prevent costly hospital visits, the past few years have seen a proliferation of startups offering supplemental health plan benefits for older adults — from transportation to home modification.

Predictions for the longevity industry in 2023 by Ram Iyer originally published on TechCrunch

5 tips for healthcare startups fundraising in a down market

In fundraising, a founder’s greatest challenge is not selling any particular product or strategy. Instead, it is often unwinding and re-aligning the investor’s biases.

The competition is not your market competitor or incumbent. More often, it is the investor’s set of operating heuristics, many of which are quickly influenced by market conditions.

Fundraising in healthcare, especially in a macro environment like the one we’re in, is an opportunity to differentiate and take control of the narrative. When markets start to dip, most companies hunker down and focus on surviving. In moments like these, healthtech companies can take advantage of the status quo gettting upset and rise to the top of a crowded field, signaling to the market why they are the horse to bet on.

Reframe the macro view

When the market seems to be trending downward, it’s an opportunity for founders to take control of the narrative and re-frame how investors view market conditions based on a deep analysis of their sector.

Broadly compared to other industries, healthcare often remains resilient during times of economic distress. When everything is going well, it’s easy to forget and even easier to underappreciate the acyclicality of the healthcare market as a whole. But a quick look at data from the Bureau of Labor shows that employment in the sector continued to grow during the last recession, a testament to how robust the sector is.

If entrepreneurs and investors treat every interaction as a one-shot game, we will all eventually lose trust.

While employment may not be a comprehensive barometer for all healthcare activity, the demand for real solutions to real pain points in healthcare will continue to be inelastic. If you’re in services, frame your business around this labor demand; if you’re developing solutions for software, operations and RCM, leverage this growing gap between the need and the adoption of technology.

In this environment, funds will be looking for acyclical markets to invest in. This is an opportunity for you to capture this capital pool.

Get granular

In a market inundated with “digital health” startups and “infrastructure solutions,” it’s vital to differentiate yourself.

Move beyond generic labels that no longer tickle the interest of healthcare investors, and instead map out the progression of your company in three acts, from seed to IPO, even if you’re already a late-stage company:

5 tips for healthcare startups fundraising in a down market by Ram Iyer originally published on TechCrunch

Digital health startups can incorporate clinical expertise into business models – here’s how

Early indications show funding to digital health startups in Q4 2022 fell so much, they’re close to levels last seen in 2019.

But the dollar amounts don’t tell the whole story. How you grow as a digital healthcare company is just as important as if you grow at all.

A company built for the long term should have clinical experts as part of its leadership to ensure that care is always based on the patient’s medical needs as well as maintain quality control.

Here’s a framework that digital health startups can consider:

Bring clinicians into senior leadership

The best-case scenario for a digital health startup is to bring on a clinician as a co-founder.

I speak from experience. My co-founder is a triple-board-certified psychiatrist who brings clinical expertise to everything she does. From evaluating product roadmap decisions with our technology department to strategy discussions at board meetings and managing our entire clinical team, her contributions are vital to the health and direction of the company.

Dedicating resources and space to full-time providers allows them to focus more on patient care — the reason they got into medicine.

Outside the C-suite, hiring clinicians as senior leaders with responsibilities beyond clinical practice is invaluable. The key is to ensure clinicians know they will report to another clinician, not a non-clinical executive.

Non-clinical leaders, including founders and non-clinical C-suite executives, should practice what they preach. They should consistently loop in their clinical partners for business discussions even if they don’t have an obvious clinical impact.

The main benefits of taking this approach include:

  • The clinical and non-clinical partnership is more active from the jump;
  • Other team members and clinical staff will see and respect the inclusion;
  • Clinicians may uncover something that has an indirect but important clinical impact.

Beyond hiring clinicians in-house, startups should consider inviting clinicians to join their board of directors. Their presence on the board helps guide a company towards becoming an ethical and sustainable medical practice focused on helping patients rather than a technology company operating at the expense of patients.

This dedication to patient outcomes is a differentiator and should be reflected at every working level of a digital health startup.

Celebrate providers’ dedication

Dedicating resources and space to full-time providers allows them to focus more on patient care — the reason they got into medicine.

Digital health startups can incorporate clinical expertise into business models – here’s how by Ram Iyer originally published on TechCrunch

How to obtain FDA buy-in and unlock more funding for your health tech startup

Many years ago, oil from Chinese water snakes was successfully used to treat joint pain until peddlers made “snake oil” synonymous with fraud. Times have changed, but the medical industry continues to walk a fine line between optical illusions and real solutions.

Now, as venture capital funding within health tech has fallen 41.2% compared to the same time last year, it’s even more important for emerging technologies to present more than promises.

By reaching for the highest standards and obtaining regulatory certification from institutions like the U.S. Food and Drug Administration (FDA), startups can show investors and clients that they’ve gone through the necessary checks for safe use in healthcare, creating more opportunity to drive long-term success.

FDA breakthrough device designation

The influx of artificial intelligence in healthcare is exciting but often met with skepticism from the public, and rightfully so. The stakes for a poorly designed digital health product are higher than any other industry, and the costs of failure much more serious.

There are many regulatory organizations that offer credibility and validation to incoming healthcare solutions, but the FDA is the best place to start. Why? The large U.S. market and its reputation for a rigorous framework around approvals will make it easier to expand down the road. Also, the FDA is one of the few agencies that has created a distinct path for software as a medical device (SaMD) to gain approval.

Startups should view privacy, safety and clinical validation not as nice-to-haves but as key components of the user persona they are building for.

The FDA’s breakthrough device program focuses on technology that will meaningfully help an overly taxed system. It’s an increasingly well-supported pathway that makes it easier for innovators to bring products to market faster, and it’s one of the best examples across the world of how regulators are responding to and working with innovators.

Devices must meet two criteria to be eligible for breakthrough device designation. First, the device must provide effective treatment or diagnosis of a life-threatening or irreversibly debilitating human disease or condition. Second, the device must meet at least one of the following: The device represents breakthrough technology; no approved or cleared alternatives exist; the device offers significant advantages over existing approved or cleared alternatives; and the device availability is in the best interest of patients.

While the FDA will give you an opportunity, it is up to your startup to test rigorously for efficacy and meet the highest standards when the time comes. The first criteria will be the most difficult bar to clear, as you must show clinical efficacy. The breakthrough device designation program is based on pilot studies done on the technology.

How to prove clinical efficacy

Recently, the Journal of Medical Internet Research analyzed over 224 venture-backed digital health startups that have raised more than $2 million in funding. The study rated each company on a scale of 0 to 10 for “clinical robustness,” 10 being the highest possible score. Of all the startups, 43.8% scored a zero. It’s no wonder venture capitalists are pulling back.

Startups hoping to secure regulatory buy-in from the FDA must test to ensure the device is more effective at treatment or diagnosis for a serious illness. This means testing not just for a device’s efficacy but conducting studies that compare it to existing, approved treatments.

How to obtain FDA buy-in and unlock more funding for your health tech startup by Ram Iyer originally published on TechCrunch

8 investors discuss what’s ahead for reproductive health startups in a post-Roe world

One of the most pressing issues the U.S. has to prepare for, perhaps, is the future it faces after the toppling of Roe v. Wade.

Come the midterm elections, voters will weigh in on candidates and, consequently, measures that will dictate abortion access and other human rights issues. The role venture capital must play in all of this is becoming clearer: There has been a push to fund more reproductive health companies, include healthcare access in ESG investments and reevaluate the safest places to open a business for women employees.

To get a clearer picture of what lies ahead, TechCrunch+ surveyed eight investors and learned what they think venture’s role should be in a post-Roe world. McKeever Conwell, the founder of RareBreed Ventures, noted the tenuous relationship between venture money and ethics. He said although there are some who might not care about human rights issues in relation to investing, he wants to double down on funding startups focused on reproductive health.

Theodora Lau, the founder of Unconventional Ventures, said she believes more venture investors should take political stances on issues. “Access to healthcare is a right; it’s not politics,” she said. “These are existential issues that should concern all of us, regardless of our role.”

We’re widening our lens, looking for more — and more diverse — investors to include in TechCrunch surveys where we poll top professionals about challenges in their industry.

If you’re an investor who’d like to participate in future surveys, fill out this form.

“Where legislation continues to lag, it’s important for technology to take a proactive stance to bring transparency to current and future innovations and mitigate the kinds of risks we see today.” Hessie Jones, partner, MATR Ventures

Meanwhile, Hessie Jones, a partner at MATR Ventures, said the due diligence process needs to go deeper to identify the risks of developing new technology. “Due diligence needs to expand past the point of founder ‘intentions.’ We have to ask ourselves: What is the potential that this technology can be used for other use cases beyond its current intention? What is the impending risk to people or groups?”

Finally, nearly everyone we spoke to is keeping an eye out for change that could come in November. “Vote,” Lau said. “With your voice, with your action and with your wallet.”

We spoke with:

Hessie Jones, partner, MATR Ventures

What was your initial response to the overturn of Roe? What are other impacts the overturn of Roe has had on your firm and investment strategy?

I grew up in the Catholic system, which vehemently opposed abortion and the right of women to decide what to do with their own body. I am also a Canadian, and our laws regarding abortion and the rights of the mother are very different than the U.S.

The Dobbs v. Jackson’s Women’s Health decision implies the rights referenced under the 14th Amendment — specifically, a woman’s right to privacy under the “due process clause,” which affirmed her right to choose whether to have an abortion — leaves all civil right precedents vulnerable to being overturned.

The assumed misinterpretation of the 14th Amendment in this opinion turns back the clock when it comes to the rights women have been fighting for years.

Where legislation continues to lag, it’s important for technology to take a proactive stance to bring transparency to current and future innovations and mitigate the kinds of risks we see today: Exposure of personal information, data surveillance and the use of personal information that will ultimately inflict harm on individuals and groups.

This is already happening, and now it has found its way into communities where reproductive data is leveraged against the data subjects.

Will the Dobbs decision affect the criteria you use to conduct due diligence?

Absolutely! Apps that have been used to help women, like Flow, Glowing and Cue, can be weaponized with warrants to identify those who are or may be seeking abortions. The data collected by these apps and Big Tech can be sold, breached or acquired via government warrants without taking into consideration the rights of the subject.

Due diligence needs to expand past the point of founder “intentions.” We have to ask ourselves: What is the potential that this technology can be used for other use cases beyond its current intention? What is the impending risk to people or groups? As well, we must, at the very least, demand privacy-by-design standards and the security of the infrastructure acquiring any personal data.

We must scrutinize founders’ intentions, how the data will be used, who the partners are, to what extent data will be shared and for what purposes. We’ve come to a perilous crossroads where technology has contributed to harms, and we now must put the onus on founders to be more accountable for what they’re building.

8 investors discuss what’s ahead for reproductive health startups in a post-Roe world by Dominic-Madori Davis originally published on TechCrunch

9 ways founders can bring automation to healthcare

For years, automation has been a key driver of transformation across industries, changing the way companies and entire sectors operate. However, healthcare, a $4.1 trillion industry, has fallen behind.

For an industry that constantly innovates, evolves and adapts, the reticence to embrace automation is frustrating, but ultimately, unsurprising. Healthcare remains in a constant tug-of-war among patients, payers, providers and pharma. This push and pull drives unnecessary costs, impacts clinical quality and leads to patient and provider dissatisfaction.

We cannot solely lay the blame on regulations. In other highly regulated industries such as financial services, automation has redefined high-friction processes. For example, automation transformed mortgage underwriting by providing consumers, brokers and banks with relevant information, rules and real-time transactions. As incumbent banks embraced startups, investors leaned into novel ways to reduce friction and improve accuracy, increasing annual mortgage origination by nearly 40% compared to the last decade.

There’s immense opportunity for similar gains in healthcare, but long-term success requires healthcare incumbents to truly commit to automation.

The ongoing COVID-19 pandemic has exposed significant cracks in our healthcare system. As healthcare systems and payer executives contend with ballooning labor costs tied to The Great Resignation and reduction in patient mindshare from the explosion of digital-native startups, they will need automation to stay competitive.

Friction created by prolonged implementation cycles, lack of adequate clinician involvement and difficult to measure ROI has left us with a healthcare system skeptical of technology.

Automation is the key to a more resilient and efficient healthcare system, but increasing meaningful adoption remains challenging. Entrepreneurs trying to navigate these waters should consider the following go-to-market tactics to increase their odds of success:

Focus narrowly on a specific “starter” problem

Even if your platform can do multiple things, you should focus on helping “onboard” prospective customers with one thing you do really well that has short go-live times, minimal customer resource requirements and clear success metrics.

Clearly define success across measurable metrics

ROI is often both qualitative and quantitative in nature, so it’s important to define the framework for your offering and weight KPIs differently based on prospective customer nuances instead of creating bespoke ROI frameworks that are impossible to keep track of.

Deliver 1x-2x ROI within a year of launch

Having clearly defined success metrics should enable automation platforms to demonstrate value within six to 12 months of launch. Ideally, companies should target 1x-2x ROI for the initial deployment to avoid underpricing. Showing ROI within a budget cycle will position companies well for future expansion.

Finger on your pulse: API-first startup Vivanta hopes to be Plaid for health

API-first companies are on the rise, not just in fintech but also in sectors like healthcare. This diversification is boosted by the fact that employees who have earned their chops on banking APIs are now applying their skills to other problems.

Healthcare is one of the sectors that could benefit from API solutions. While there is value in knowing your heart rate or glucose levels, an API can help companies give its end users a much more global view of their well-being, allowing them to take the right steps to stay healthy.

Mexico-based startup Vivanta lives at this intersection of healthcare and APIs. Its focus is health data, with an eye on the fact that wearables are becoming ubiquitous. But its co-founders Alex Hernandez and Jorge Madrigal previously worked together at fintech companies: Arcus, acquired by Mastercard last December, and Belvo, which is API-led and sometimes described as “LatAm’s answer to Plaid.”

This API-centric track record was key for the startup to raise a $300,000 pre-seed round even before launching its product — Vivanta is doing a private launch next month.

“We invested in Vivanta because Jorge and Alex have a successful track record of pushing new API products into the market,” said 99startups managing partner Alejandro Gálvez, who participated in the funding alongside Guadalajara’s Redwood Ventures, Monterrey’s Angel Hub MTY and Mexico-focused syndicate Lotux.

Vivanta’s founders also invited a dozen individuals to participate in the round, with a focus on operators with relevant expertise. “Being able to ask questions to people who’ve done it before is invaluable,” Madrigal told TechCrunch. “We wanted to have a strong network of people that we can lean on.”

Some of Vivanta’s angel investors are founders themselves, such as Arcus’ Edrizio de la Cruz, Madrigal’s and Hernandez’s former boss. But the pair also made a deliberate effort to reach out to technical profiles that are perhaps less common on cap tables — including female engineers and CTOs currently building APIs.

For mental health startups, happiness is in niches

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Last April, Alex and I reported CB Insights data showing that venture investment into mental health startups had dropped sharply in Q1 2022 compared to the preceding quarter. But in the last couple of weeks, I have heard about several venture-backed deals into the subsector of health tech. They got me curious: In which areas of mental health are VC firms still willing to invest? Let’s explore. — Anna

Mood swings

The more the pandemic seemed to subside, the less venture capital investors seemed willing to commit to companies and sectors that had initially benefited from strong tailwinds when most of the world started staying at home. On public markets, the pandemic trade is over, with former darlings like Peloton and Zoom experiencing whiplash. Similarly, we saw a net decline in private investment into telehealth and mental health startups.

Market corrections after a period of hype are part of the investing game. But it would be hard to argue that mental health needs have decreased. According to the World Health Organization, incidents of anxiety and depression increased by 25% in the first year of COVID-19. Just because we are now hopefully leaving the worst of the pandemic behind us doesn’t mean everyone is suddenly feeling better — which is why a few recent funding rounds in the mental health space raised my attention.

Of course, a few mental health–related deals are anecdata. And since we are talking mostly about early-stage deals, this doesn’t mean that the investment decline has been reversed. In aggregate, we will only have more clarity once Q2 numbers are available. But what’s interesting is that these startups hint at some novel approaches to mental health in which VCs are still willing to invest. Or, dare I say, show us where their mind is at.

No longer underserved?

VCs might have no headspace left for the next Headspace. The broad-ranging mental health-focused platform and its most direct competitor, Calm, seem to have captured most of the mainstream market for bite-sized mindfulness. But there are still gaps in the mental health market to address — at least, some startups think so.