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A small cap with a game-changing US contract

As its $188mn multi-year deal shows, this app developer’s potential looks boundless
July 13, 2023

The Covid-19 pandemic has brought teenage mental health issues into the limelight. During a time in their life when they should have been going to school, playing sports and making friends, they were stuck at home arguing with increasingly stressed parents over their online learning. A 2021 survey carried out by the charity YoungMinds found that 67 per cent of people between the ages of 13 and 25 in the UK believed lockdowns would have long-term negative effects on their mental health.

Tip style
Growth
Risk rating
High
Timescale
Long Term
Bull points
  • Deal lays ground for US growth
  • Large target market
  • Economies of scale
  • Strong balance sheet
Bear points
  • Step-change execution risks
  • Yet to make a profit

It is too soon to assess the actual long-term impact, but it is well-established that young people’s mental health in both the UK and US had been deteriorating well before Covid-19. Before the pandemic hit, 11.5 per cent of Americans aged 12 to 17 already suffered from depression that was “severely impairing their ability to function”, according to Mental Health America. Office Practicum, a software developer for paediatric care systems, noted this age group also saw “a 27 per cent increase in anxiety and a 24 per cent increase in depression between 2016 and 2019”.

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