Mental health illness costs the Canadian economy more than $51 billion every year. For businesses that means a total of $6 billion in lost productivity, which works out to almost $1,500 per employee each year.

For many, mental health is not just a societal problem, but an economic issue that’s wreaking havoc on both big and small companies, alike.

Recently a new generation of startups have stepped up and viewing mental health as more than just a problem that needs to be solved, but something more. These entrepreneurs see the issue as a chance to make a difference and lucrative opportunity to truly innovate an underserved (and oft forgotten) market.

Canadian startups — like Inkblot, WellCalm and Newtopia — are building new solutions that can prevent, diagnose and even treat mental health issues across Canada. Of course, working in the space is no easy feat. For a long time, mental health was rarely discussed, frontline work often underfunded and a burden placed on Canada’s overstretched health system. Today’s health gamechangers are working to fix that one product at a time.

Making a difference and making money

There’s no cut-and-dry solution to fixing the country’s mental health woes, but technology can help, explains Jeff Ruby. He’s the founder of an innovative startup called Newtopia — a health and wellness company that recently raised $10 million to expand its health management services.

Tech can play a role in connecting people with the tools they need to take charge of their overall health, although it isn’t the quick fix most people want it to be, he says. “I think there’s an important role for technologies to play, but there’s also a caution. Technology alone is not the sole answer. It’s a combination of technology-enabled services that have a human component.”

Ruby suggests startups looking to enter the space first understand who they hope to help with their products. Why? It can help them identify how they plan to succeed in a challenging industry that can be hard to navigate and, at times, can be susceptible to health regulations and federal oversight. “Really beware of the distribution economics. It’s not if you build it they will come. There’s no killer app for health and mental health. It’s about understanding are you working with employers, providers or direct to consumers.”

Of course, for startups willing to invest the time in creating a winning product there are several opportunities to grow. According to CB Insight, health and wellness tech startups saw a record number of investment deals in 2017. Some of the biggest deals include a $40 million Series B investment for Quartet Health, one of the largest mental health tech deals since 2012 that featured heavyweights like Google Ventures, OAK HC/FT Partners, Polaris Partners, and F-Prime Capital. Not too far behind was a $37 million Series B deal for meditation startup Headspace and a whopping $35 million deal for mental health platform Lyra Health.

Advice from the experts in the industry

Julia Sabine, chief marketing officer for online therapy platform Inkblot believes the best health-focused businesses will be those that can make a difference for the community they intend to serve. And, the tech enthusiast knows what she’s talking about too. Since launching, her company has managed to signup Canadian tech giants like TribalScale, The League and WealthSimple by revolutionizing how clients access on-demand mental and wellness help.

Through the company’s online services, clients can instantly connect with therapists, life coaches, psychologists and other experts from across Canada in the blink of an eye. “Right now, investors are smart to invest in mental health because the government is finally putting money behind it but I also think it’s on the rise because millennials are talking about but at the same time,” she explains.

To bolster success, entrepreneurs looking to work in the space should connect with companies and HR programs (like Employee Assistance Programs offered by the Ontario government and group benefits providers) to beta test their products.

As founders get better at applying new technology to mental health issues, Ruby hopes it becomes more acceptable for people to seek out help without discrimination and also draw attention to how tech can play a role in helping people. “I don’t see more startups as competition if at the end of the day we’re all working to make Canadians healthier.”

The DMZ is a leading business incubator for tech startups in Canada. They help startups build great businesses by connecting them with customers, capital, experts and a community of entrepreneurs and influencers.

The DMZ is a partner in StartUp Here Toronto.