Understanding investor attitudes to immersive technology for mental health: a look behind the curtain

April 11, 2024

Hitesh Thakrar is Chair of the Health Innovation Network, South London and an experienced investor in the technology sector, having spent over 25 years investing in public equities in the life sciences, information technology and innovation sectors.

Since 2015, he has moved into early stage venture investing, and is currently a Partner at Syncona Limited (a Wellcome Trust backed early stage venture fund), a Governance Board Member of KQ Labs at the Francis Crick Institute, an accelerator with the Turing supporting next generation businesses in data science and life sciences, and the Chair of the Investment Committee for Newable Ventures (a pre-Series A deep tech fund).

As someone who has led investment into immersive technology myself, I was delighted to chair a recent roundtable event bringing together investors with an interest in immersive technology in mental health.

In the competitive world of investing, these types of open and honest conversations between experts can be few and far between. I would like to extend my thanks to all our attendees for their candour and enthusiasm – and I look forward to their contributions to the project in the future.

The event was an important early milestone for the Innovate UK Mindset-XR Support Programme which the Health Innovation Network South London (HIN) is delivering. My colleague Amanda, HIN Director of Digital Transformation and Technology, recently wrote an excellent blog giving some of the background on the Mindset programme and the pressing need for transformative change in mental health. If you haven’t already, it is well worth a read to learn about the programme and why we are placing such importance on this work.

What was clear right from the outset of our event is that investors are very much on the same page as Amanda and the Mindset team when it comes to embracing the potential of technology to tackle the nation’s mental health crisis.

The fact though, is that virtual, augmented and extended reality aren’t the only games in town when it comes to MedTech for mental health. And, indeed, mental health is far from the simplest potential application for the next generation of immersive technologies.

So – what are the barriers and opportunities for investment in this area?

Some good news is that immersive technology and mental health are both areas where passion, excitement and personal interest play a role in decision making for investors. Investors are humans rather than robots; some of those who joined us at our roundtable spoke bravely of their desire to improve mental health following lived experiences of mental illness, others of the exciting vision that they saw for technology used in computer games making a difference to society.

Those passion points might be enough to pique initial interest among fund managers and sway the odd marginal decision, but sustainable funding inevitably depends on being able to build confidence around return on investment (ROI).

While the consensus in the room was that reliably realising ROI in this area is far from a given today, the mood was optimistic about prospects for the future. To that end, we identified a number of development areas which will help to shape the commercial counsel we provide to the innovators on our Mindset-XR programme.

Those priorities were:

Helping innovators, clinicians and investors to pull in the same direction

Immersive technology brings together experts from a wide spectrum of different fields; medicine, gaming, visual arts, engineering and artificial intelligence to name but a few. Regardless of their background, for innovators to thrive they need to be confident navigating the complex world of health and care.

Finding a common language and understanding the cornerstones which must be in place for healthcare success in terms of patient safety, clinical oversight and regulatory approvals are key. Given our experience delivering the award-winning DigitalHealth.London innovator support programmes, this upskilling feels like exactly the sort of challenge we are particularly well-suited to rise to.

Prioritising innovation based on clinical need

At a time where mental health services are universally stretched, there are no end of possible problems to try and tackle. However, the scale, complexity and urgency to solve these problems varies enormously.

To be successful, innovators need a clear view of the condition(s) they are targeting, current approaches to treatment, and how their innovation might fit into existing clinical pathways. This makes early clinical and commissioner engagement essential to avoid building “white elephant” innovations – technically impressive but out-of-sync with what the system really needs.

Having attendees at the roundtable representing local and national mental health systems felt like a great start to this work, and we look forward to forging meaningful partnerships between innovators and clinicians throughout the course of the programme.

Exploring different funding models and mechanisms

One of the areas we explored during the roundtable was the disparity in progress between work happening in immersive mental health technology on either side of the Atlantic, and what could be learned from our American cousins about supporting innovation through different funding models.

Understandably, many innovators are focused on the NHS as the primary buyers for immersive mental health innovations. While the NHS is a huge market, access is complex and for nascent and potentially expensive technologies such as VR, AR and XR for mental health there may be other options worth exploring. These include working with insurers, targeting the self-funding market and developing innovative partnerships with pharmaceutical companies.

I left the roundtable discussion full of ideas and enthusiasm for the work that we are leading. While we are in the early stages – both of our programme and of realising the potential of immersive technology for mental health – we are already developing a formidable alliance of innovators, clinicians and investors determined to make a difference.

We want to send a special thanks to the following for their support and attendance:

I look forward to our next events. Please do get in touch with the team if you would be interested in joining us.

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For more information about Innovate UK's Mindset-XR Innovation Support programme, delivered by the Health Innovation Network, South London, please get in touch.

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