The promising rise of mental health startups in Indonesia

East Ventures’ thesis on mental health startups

March 28, 2022

In the summer of 2021, when the Delta variant hit Indonesia, waves of panic and tragedy were felt throughout the nation. On the ground, people were desperate to find oxygen concentrators, vitamins, supplements, and all sorts of resources in order to prepare for the worst. At the height of the surge of Delta, our team at East Ventures decided to take a step back and intentionally take time to check in and call our founders. As we scheduled calls and took time to provide support, we realized that many of our founders and team members were feeling the weight of the fear, loss, anxiety, and sadness that marked this period of time. Many in our community were severely impacted by this wave and we took time to mourn and be present with our people. It was also in this period that many founders reported feeling waves of depression, anxiety, and even trauma. 

As a firm, we saw how pivotal it would be for mental health startups to innovate and scale in these unprecedented times. There has never been a more important time for innovation and access in the mental health vertical. Thus, this past year, we took big bets on startups innovating in this space. We wanted to actively champion startups that would directly be able to help our communities.

A global shift: rise in the urgency to support mental health startups

In the last two years, the onset of the unprecedented conditions brought about by the pandemic has changed the way we live, the way we work, and the way we relate to one another. Our lives have been, to some extent, defined by uncertainty and fear of the unknown. It is within this context that the conversation around mental health became more prominent and prevalent. The key drivers for the growth of this sector include the overall documented rise of mental health issues and illnesses in Indonesia, the rise in awareness and education of the general public, and the uptick in investor activity in this vertical. On a more macro level, there has been a global shift in consumer demand for quality health and wellness services and a significant lift in education and affluence in Southeast Asia, presenting a promising context for this industry.

However, we are also mindful that when we look at the region’s cultural and historical roots, it is no surprise that the adoption of mental health services has been challenging and scarce. There is an endless amount of social taboo, incorrect preconceived notions, and outdated biases when it comes to mental health. For too long, much of the narrative regarding mental health has been shunned and set aside because of the cultural prejudice against it. Even in more progressive and developed countries like the United States, mental health-related benefits and budget allocations remain arguably lacking. 

A mental health survey conducted by the Association of Indonesian Mental Medicine Specialists (PDSKJI) in 2020 regarding anxiety, depression, and trauma showed that 63% of respondents experienced anxiety, 66% of respondents experienced depression due to the COVID-19 pandemic. Moreover, 80% have symptoms of post-traumatic psychological stress due to experiencing or witnessing unpleasant events related to COVID-19; and  46% of respondents experienced severe post-traumatic psychological stress symptoms. These statistics highlight the necessity for the growth of quality mental health services and offerings.

In parallel, another key factor to the development of this vertical is the overall rise in education and wealth in Indonesia and throughout Southeast Asia, allowing for increased awareness regarding this vertical. With the consistent rise in consumer engagement with mass digital and social media platforms, many influencers have leveraged their platforms to educate their respective audiences, working to destigmatize mental health issues over time. These figures play a pivotal role in helping shape the market’s readiness in normalizing the adoption of these services.

From an investor perspective, the outlook is also becoming more favorable. According to CB Insights, mental health startup funding reached a historic record of US$ 852 million in the first quarter of 2021, nearly twice the amount raised during the same period in 2020. The surge of capital allocation towards mental health startups at a global scale and the rise in the number of entrepreneurs entering this space signals that though this industry might be in its sunrise stages in this region, it will continue to advance. 

Firm thesis

At East Ventures, we are consistently looking to back the best founders. It is an exciting time for entrepreneurs in the mental health space because they are natural pioneers and changemakers. That’s why we started taking big bets on emerging mental health trailblazers in Indonesia. 

Last year, we invested in Intellect, Mindtera, Riliv, and Bicarakan.id. We championed these startups because each plays a distinctive and essential role in moving the mental health ecosystem forward in Indonesia and Southeast Asia. 

Intellect, co-founded by Theodoric Chew and Anurag Chutani, is a B2B2C platform that works directly with companies to offer an end-to-end solution for workers and consumers to procure access to quality mental health services. As a holistic and easy-to-use platform to access and monitor mental health and wellness daily, Intellect also offers the ability to consult with qualified life coaches, counselors, psychologists, and psychiatrists throughout the Asia Pacific (APAC) region. 

On the other hand, Riliv and Bicarakan.id offer Indonesian consumers a more localized and thoughtful set of offerings. These startups focus more on providing its audience education regarding the importance of mental health, destigmatizing mental health services amongst Indonesians by providing access to quality content, counselors, and psychologists. In terms of the Go-To-Market (GTM) strategy, Riliv, co-founded by Audrey Maximillian Herli and Audy Christopher Herli in 2015, provides health and wellness offerings for both B2B and B2C segments. In contrast, Bicarakan.id, founded by Andreas Handani, focuses on B2C-centric online and offline counseling. 

Last but not least, we also invested in Mindtera, which heavily focuses on workplace wellness. Co-founded by Tita Ardiati and Bayu Bhaskoro, Mindtera provides high-quality content and information related to stress management while simultaneously offering life coaches access when stress levels escalate. These life coaches play an important role in career longevity and provide an option for companies in Indonesia to allocate a wellness budget so that their workers can have an outlet to recalibrate and re-invigorate productivity. 

Every year, mental health disorders cost the global economy USD 2.5 trillion. As of 2020, 1 in 5 millennials experiences severe anxiety and depression. These statistics depict the key role that our portfolio companies will play both in the short and long term.

Market Outlook & Opportunities Ahead

According to the New Global Wellness Institute report, the global wellness economy was worth US$ 4.4 trillion in 2020 and is estimated to grow 10% annually through 2025. Similarly, the Asia Pacific regional market for mental health is expected to experience significant growth between 2020-2016 and is anticipated to generate US$ 1.9 million by 2026. Indonesia’s rising awareness in the importance of preventative healthcare, coupled with the limited availability of such services presents a huge opportunity. Increasing GDP per capita in Indonesia signals an expected higher proportion of spending towards healthcare. Furthermore, investors are also signaling a strong interest in supporting the development of mental health startups, quadrupling funding amount since 2015. 

Despite its optimistic context, like any budding industry, this vertical will also run into its fair share of challenges. As for most mental health companies in the world, on the demand side, barriers to growth will likely be caused by the lack of socialization and the existing taboo within the general public regarding mental health issues. Adoption will inevitably take some education and time. 

Simultaneously, in Indonesia, the supply of qualified mental health professionals will also need to ramp up to support meaningful growth. A 2016 Human Rights Watch study indicated that Indonesia has a shortage of licensed psychiatrists, an average of only one for every 300,000 to 400,000 people. This underlines the need for more qualified and licensed professionals in the long run. 

For a better tomorrow

Regardless of the challenge ahead, we are firm believers that this vertical will continue to progress colorfully. We are thrilled to see how our portfolios will continue to innovate and pioneer and partake in helping build a healthier and more sustainable Indonesia. 

These companies are critical because ultimately, they play an important role in supporting a multitude of Sustainable Development Goals (SDGs) and reap many positive externalities. The mental-health startups serve to support the respective SDGs: 

  • Number 3: Ensure Healthy Lives and Promote Well-Being for all 
  • Number 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
  • Number 8: Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all
  • Number 10: Reduce inequality within and among countries
  • Number 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all, and build effective, accountable, and inclusive institutions at all levels
  • Number 17: Strengthen the means of implementation and revitalize the global partnership for sustainable development

In truth, addressing these mental illnesses and finding meaningful and lasting solutions to process, cope and heal is important for everyone. If we want to create a sustainable, conscious, responsible, and robust economic ecosystem, the quality and wellness of our human capital must continue to be prioritized.

With the increase in literacy regarding the importance of the conversation around mental health, we believe that the foundations of a robust Indonesian economy will continue to strengthen. Investing in mental health today – for a better tomorrow. 

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By Stacy Oentoro, VP of Investment at East Ventures