| When Headspace merged with on-demand mental healthcare platform Ginger, I was surprised. After all, Ginger raised $100 million in Series E funding just a few months ago — and last time I spoke to CEO Russell Glass, he stressed the importance of integrating into employer-paid health plans. To me, Headspace's meditation app is about as direct to consumer as one could go, so what business did Ginger have to get into literal business with it? Fragmentation, much? Turns out, there's precedent, and, per a slew of health tech investors and techies, there is more consolidation and commodification to come in behavioral health. I love learning things! As we discussed during a Twitter Spaces about the merger, Headspace has been pursuing clinical validation for mindfulness for quite a while. That validation could help it pitch its somewhat-fresh employee benefit program and compete with its closest rival, Calm. By merging with an on-demand mental healthcare platform such as Ginger, Headspace can now offer a more holistic approach to mental health. Ginger, for those who don't know, specializes in helping people access care when they need it, ranging from text-based support to escalation to trainers in real time. But beyond the news, what does this mean? There are a few main takeaways I had after the Spaces. First, in the best-case scenario, Headspace and Ginger's merger could show us what a holistic and integrative approach to mental health could look like. As Omers Ventures' Chrissy Farr said, some patients could use a combination of approaches that vary over time. The industry is evolving so that users have more options when it comes to mental health care; from meditation to texts to Zoom therapy sessions. Second, and this came up throughout the chat, parts of behavioral health are going to get commoditized as the sector grows. Now, it's no longer enough to just connect a user to a specialist. How do platforms more thoughtfully connect nuanced patients to nuanced options? It's more than holistic, it's integrative, says Lux Capital's Deena Shakir. Finally, 2021 is all about consolidation — and that includes digital health. 7WireVenture's Alyssa Jaffe noted that 80% of the cost and complexity in mental health is with severe mental illnesses, but 80% of startups begin with lower acuity care. The new combined entity could become more acquisitive in what it aspires to address, now, beyond non-acute conditions. In the rest of the newsletter, we'll get into fintech's friendly foes, edtech turning into SaaS and a must-read LatAm deep dive. As always, you can support me by following me on Twitter @nmasc_, where I post all my work throughout the week. |
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